HJ 

9927 

.T4L63 


CBN BRNCH 
GenColl 



REPORT 


ON THE 


FINANCIAL CONDITION 

or THE 

KASHMIR STATE, 



























































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REPORT 


ON THE 


FINANCIAL CONDITION 


OF THE 


KASHMIR STATE, 


BY 


R. LOQAN, O.S., 

IA 

Accountant General, Bombay, on Special Duty. 


Id 0 lit I) 3 }} : 

PRINTED AT THE GOVERNMENT CENTRAL PRESS. 


1891. 




TABLE OF CONTENTS- 


Paha - Pagb. 

1. Introduction ... ... ... ... ... 1 

2. Orders of the Government of India ... ... ... 1 

3. Procedure in the collection of information ... ... 1, 2 

4. Area and boundaries of Kashmir ... ... ... 2 

5. Population ... ... ... ... ... 2, 3 

6. History ... ... ... ... ... 3 

7. Character of the people ... ... ... ... 3 

8. Trade ... ... ... ... ... 3 

9. Trade routes and means of communication ... ... 4 

10. Railway into Kashmir ... ... ... ... 4 

11 - 14. Accuracy of statistics of exports doubtful ... ... 4, 5 

15. Route for railway for military purposes ... ... 5 

16. Crops and produce ... ... ... ... 5 

17. Manufactures ... ... ... ... ... 5 

18. Rainfall ... ... ... ... ... 5 

19. Food of the people ... ... ... ... 6 

20. Previous remarks apply chiefly to Kashmir proper... ... 6 

21. Immigration ... ... ... ... ... 6 

22. The State Council ... ... ... ... 6, 7 

23. The future of the Council ... ... ... ... 7 

24. The Maharaja ... ... ... ... ... 7, 8 

25. The system of administration ... ... ... 8 

26. Administrative divisions open to improvement ... ... 9 

27. The Accounts Department... ... ... ... 9 

28. The accounts system ... ... ... ... 9 

29. Accounts kept by the Samvat year ... ... .... 10 

30. No account rules in existence ... ... ... 10 

31. The Audit Department ... ... ... ... 10 

32. Receipts for payment of money ... ... ... 10 

33. The Daftar Diwani and Revenue Member’s Office ... ... 10, 11 

34. The Budget system ... ... ... ... 11 

35. Budget Estimates of expenditure ... ... ... 11 

36. Cost of the Acpount and Audit Department -- ... 11, 12 

37. Comparison with Assam Account Office ... ... 12 

38. Cost of a proper Account and Audit Office ... ... 12, 13 

39, 40. Recruitment of the proposed Account and Audit Office ... 13 

41. Accounts to be kept in English and Persian ... ... 13, 14 

42. Effects of establishment of a new Account Office ... ... 14 

43. Offices rendering accounts to the new Account Department ... 14 

44. Audit of bills at Srinagar ... ... ... ... 14 

45. Control of State money ... ... ... ... 14 

46, 47. Duties of Comptroller and Account Office ... ... 14, 15 

48. The position and powers of the Comptroller ... ... 15 

49. State accounts to be compiled as a whole ... ... 15 

50 - 53. Examination of the State accounts ... ... ... 15, 16 

54. Revised statements of Revenue and Expenditure ... ... 17 

55. Closing cash balance of Samvat 1947 ... ... ... 17 

56, 57. Further examination of the accounts of Samvat 1947 ... 17 

58. Real balance at credit at the end of Samvat 1947 ... ... 18 

59. Rs. 50,000 with the Panjab Banking Corporation ... .... 18 

60. Ignorance of Account Department of accounts kept outside the 

State Treasuries ... ... ... ... 18 

61. Postal and other receipts ... ... ... ... 18 

62. Postal and Telegraph Service messages ... ... 18, 19 

63. Telegraph lines in the State ... ... ... 19 

64. Probable results of taking over the lines by the Government of 

India ... ... ... ... 19 

65. State postage stamps ... ... ... ... 19, 20 

66,67. Classification of receipts and expenditure ... ... 20 

68. Arrears and debts due by the State ... ... ... 20 

69, 70. Evils of the arrears system.., ... ... ... 20, 21 

71. Arrears in Samvat 1947 ... ... ... ... 21 

72. Method of dealing with the arrears in the accounts ... 21 

73. Reduction in amount of arrears at first exhibited ... ... 21 

74. Audited arrear claims ... ... ... ... 21, 22 

75. Debt due to the Dliarmarth Fund ... .... ... 22. 



H 


CONTENTS. 


Paba. Page. 

76. Statement of "Revenue and Expenditure for Sa?nvat 1947 ... 22, 23 

77. Revenue of Sam vat 1947 ... .... ... ... 24 

78. Expenditure of Sam vat 1947 ... ... ... 24 

79. Land revenue of Jammu ... ... ... ... 24 

80, 81. Settlement in progress in Kashmir ... ... ... 24 

82. Realisation of land revenue in kind in Kashmir ... ... 25 

83. Revenue in assessed Tahsils ... ... ... 25 

84. Revenue in the unassessed Tahsila ... ... ...25,26 

85. Unhusked rice or 1 shali ’ ... ... ... ... 26 

86 , 87. Method of collection of ‘ shali ’ ... ... ... 26’ 

88 , 89. Tehvildars receive no salary ... ... ... 26, 27 

90,91. The system of collecting ‘shali’ a series of frauds 27 

92. Reduction in payments in ‘ shali ’ inevitable .... ... 27 

93, 94. Arrears of land revenue ... ... ... ... 27, 28 

95. The land revenue administration in general ... ... 28 

96. Sale of villages on contract to be stopped .... ... 28 

97. Tahsildars should be responsible for delivery of revenue in kind- 28 

98. Sale of produce realised as revenue in kind . — .. ... 28, 29 

99. Necessity for periodical tours by the Revenue Member . . 29 

100 . Proportion in which the revenue is paid in kind ... ... 29 

101. The ‘ begar ’ system ... .... ... ... 29 

102 . Proposals regarding, ‘ begar ’ ... .... ... 29,30 

103. Customs duty ... ... ... ... ... 30 

104. Octroi ... ... ... ... ... 30 

105, 106. System of realising the Customs duty ... ... ... 30 

107. Proposed future arrangements ... ... 30 

108, 109. Grazing fees ... ... ... ... ... 30, 31 

110. Excise ... ... ... ... ... 31 

111 . Wine and cider ... ... ... ... 31 

112 . State property in British India ... ... ... 31,32 

113. Property leased to a contractor ... ... ... 32 

114. Suggested sale of the larger portion of the State property in 

India ... ... ... ... ... 32 

115. Judicial fines and Jail receipts ... ... ... 32 

116. Contracts of State monopolies .... ... ... 32 

117. Interest ... ... .._ ..._ ... 32 

118. Forests ... ... ... ... ... 33 

119. Amounts due to the Forest Department -.. .... 33 

120 . Sericulture ... ... ... ... .... 33 

121. Amounts due to the silk factory ... ... 33 

122. Hops ... ... ... ... ... 33 

123. Vineyards ... ... ... ... ... 33 

124. Miscellaneous revenue .... ... ... ... 34 

125. “Kut” root ... ... ... ... ... 34 

126.. Realisation of arrears -.. ... ... ... 34 

127. No credits from Public Works, Medical Departments, &c. ... 34 

128. The Civil List ... ... ... ... ... 35 

129. Nature of the Civil List ... ... ... ... 35 

130 - 133. The Maharaja’s cash allowance ... ... ... 35 , 36 

134. Estimate and actuals of Samvat 1947 .... ... .... 36 

135. Estimate and actuals of Samvat 1948 ... ... ... 36 

136. These items do not represent entire income of Maharaja and his 

family ... ... ... ... ...36,37 

137. The Modikhana charges ... .... ... ... 37 

138. Estimated: cash and Modikhana allowances ... ... 37 

139. Question whether the Civil List is susceptible of reduction. ... 37 

140. Modikhana supplies to the Maharaja ... ... ... 38 

141. Considerable reduction necessary ... ... ... 38 

142. Proposals regarding the Civil List ... ... ... 38 

143, 144. Future Civil List if proposals agreed to ... ... 39 

145, 146. The Army ... ... .... ... ... 39 , 40 

147, 148. Former and present strength and cost of the Army... ... 40 

149. Pay of the sepoys ... ... ... 40 

150.. Regimental Funds ... ... ... ... 40, 41 

151. Present cost of the Army ... ... ... ... 41 

152. Carriage of grain to Gilgit .... ... ... ... 41 

153. Summary of views regarding the Army ... ... 41 

154. The charges for the State Council ... .... ... 42 

155. The Revenue Department ... ... ... ... 42 

156. Public Works Department ... ... ... ... 42 

157. Superior Public Works Engineering Stafi ... ... 42 

158. Revision of Engineering Staff ... .— ... 43 ; 


CONTENTS. 


Ill 


Para. 

159. Ordinary Public Works expenditure in future 

160. The Gilgit Road 

161. The bridges on the Gilgit Road 

162. Cost of the Gilgit Road ... ... ... ... 

163. Alternative routes to Gilgit 

164. Excess of expenditure over income in Samvat 1947... 

165, 166. The Budget Estimate for Samvat 1948 

167 - 178. Revised revenue figures 

179. Total revenue as revised 

180. Revised figures for expenditure—Civil List 

181. The Army 

182. The Foreign Department ... 

183. No permanent reductions in establishments estimated for in 

the current year 

184. The Revenue Department ... 

185. The General Department ... 

186. Public Works Department ... ... ••• 

187. The Judicial Department ... 

188. Net ordinary expenditure in Samvat 1948 

189. Administration of revenue not satisfactory ... ... 

190. Results of a continuance of present revenue administration 
191, 192. Amount required to pay all charges 

193 - 195. Suggested Budget Estimate for Samvat 1949 

196. Remarks on revenue administration 

197. Permanent reductions in expenditure ... 

198. Annas and pies to be omitted in Budget Estimates 

199. Minor measures for increasing the revenue 

200. Detail of proposed permanent reductions in expenditure ... 

201. Natural products and method, of disposal 

202. State Pushmina 

203. State Borax, Antimony and Cotton 

204. The Reserve Treasuries 

205. Money in Reserve Treasuries said to be regarded as an appan¬ 

age of the ruling family... 

206. Dates of deposit of money ... 

207. The amount formerly in the Reserve Treasuries ... ... 

208. Character of the deposits has never interfered with the with¬ 

drawal of money when required 

209. Counting of the money in Riasi and Salal 

210. Riasi Treasury ... 

211. Salal Treasury ... 

212. Jammu Treasury 
213-217. Total in the Treasuries 

218. Discussion of the Reserve Treasury balances 

219. Proposals regarding the Reserve Treasuries 
220, 221. Effect of proposals 

222. The Dharmarth Fund 

223. The income of the fund 

224. Cash contributions to the fund ... 

225. Administration of Dharmarth villages... 

226. Administration of the fund... 

227 - 229. Loans from the Dharmarth Fund 

230. Present management of the fund 

231. Capital of the fund as per accounts 

232. - Debt due by the State 

233. Outstandings ... 

234. Actual capital of the fund ... 

235. Revenue in Samvat 1947 ... 

236. Expenditure in Samvat 1947 

237. Real expenditure of the fund 

238. Future of the fund 

239. Proposals regarding the Dharmarth Fund 

240. Results of these proposals ... 

241. Conclusions 

242. Principal recommendations.-.. 

Appendix I (paragraph 25) 

Appendix II (paragraph 47) 

Appendix III (paragraph 67) 


Pass. 

43 

43 
43, 44 

44 

45 
45 

45-47 

48 

48 
48,49 

49 
49 

49 

49 

49 

49 

49 
49, 50 

50 
50 

50.51 

51.52 

52 

52.53 

53 
53 

53-57 

57 

57 
57, 58 

58 

58 

58 

58 

58 

58 

59 
59 

59 
59, 60 

60 

60,61 

61 

61 

62 

62 

62 

62 

62, 68 
63 
63 
63 

63 

64 
64 
64 
64 

64 

65 

66 
66,67 
67, 68 

69 

70-73 

74-78; 










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Confidential. 


REPORT 

ON THE 

FINANCIAL CONDITION OF THE KASHMIR STATE. 


In accordance with instructions received from the Government of India, 

Introduction 1 Bom ^ a y on the 10th August 1891. I remained 

for a few hours at Lahore to make arrangements for 
clerical assistance, arrived at Rawalpindi on 15th August, and joined the 
Resident in Kashmir, Colonel Prideaux, at Gulmarg on the 19th August. From 
the 19th to the 23rd August I was engaged at Gulmarg, having frequent 
interviews regarding the financial condition of the State with the Resident and 
Raja Amar Singh, the President of the State Council and youngest brother of 
His Highness the Maharaja. I left Gulmarg and arrived at Srinagar on 21th 
August. I remained at Srinagar until 13th November, being present during the 
visit of His Excellency the Viceroy to Kashmir. Prom Srinagar I proceeded to 
Jammu, where I remained for six days. I left Jammu on 26th November 
and returned to Bombay on the 3rd December. 


_ , , ^ „ i 2. The orders of the Government of India in 

of India" 8 ° 6 overnmen the Foreign Department on the subject of my deputa¬ 

tion were as follows :— 

“ The object of your deputation is briefly that you should examine, on the spot, the 
financial condition of the State and submit proposals for the proper administration of the 
finances in future. You should endeavour to make an estimate of the actual revenue and 
expenditure, and of the sums now held in cash or securities, and should enquire into the 
capability of the State to discharge arrears of pay and to execute the public and military 
works on hand without borrowing, and to carry on the annual administration without exceed¬ 
ing the annual income. The Government of India hope you will be able to devise some not 
too elaborate system of keeping accounts of revenue and expenditure and a proper method 
for supplying money for public purposes. The provision of adequate working cash balances, 
and of some plan for investing surplus revenues or accumulated savings is an important 
point. 

“ In fact, the Government of India wish to be informed generally as to the solvency and 
prospects of the Kashmir State, and to be advised as to the means which should be adopted 
for improving its financial condition in the future.” 

3. In the course of this report I shall indicate, whenever it may seem to 
be necessary, my authority for any particular state- 
^Procedure m the co. ec ion men t. As re g ar q s m y general procedure in the collec¬ 
tion of information, it may be stated that for about a 
month after my arrival at Srinagar I had two clerks with me as assistants in 
my enquiries. * After that one of my assistants returned to India. The clerk 
who remained with me throughout had been for a time employed in the Kashmir 
Account Office, the Daftar Diwani as it is called, and was therefore well quali¬ 
fied to assist in purely technical work. 

It was, however, necessary for many reasons that my own enquiries should 
he made quite independently of those made under my direction by my assistants. 

I very soon ascertained that any single source of information, whether that 
source was the Account or any other office, could not be depended on for accurate 
information or results. Each statement and each return which I received 
required to be compared with and tested by means of as many other statements 
and returns as could possibly be obtained, and the final results, after every con¬ 
ceivable source of information had been exhausted, were often meagre, unsatis¬ 
factory, and sometimes contradictory. The admission that a mistake had been 
committed in some particular statement or return appeared to be considered an 
adequate and satisfactory explanation of the want of care which had led to the 
error, and it seemed to be almost impossible to convince some of the officials, so 

con 1420—1 




2 


slovenly is their general work, that mistakes in simple addition or omissions to 
record particular items of receipt or expenditure in the State accounts were any¬ 
thing more than the ordinary incidents of official life in all offices which dealt 
with accounts. 


A considerable portion of my time was of necessity given up to lengthy 
interviews with Native officials. It lias been my practice during the progress 
of each interview or immediately after it to note briefly the more important 
points brought to my notice. Provided any person, whether official or non¬ 
official, asked for an interview in an open manner I was always willing to 
receive him and to listen patiently to his statements, but except on this condition 
I declined to see any person. I also declined to listen to any tales of corruption 
or intrigue, whether referred to in general terms or with the mention of the names 
of officials now or in the past in the service of the State. I always referred per¬ 
sons bringing such tales to the Council and stated that I did not see how my 
enquiries would be furthered by listening to them. The Resident, Colonel 
Prideaux, was always ready and willing to assist me in every way, and I obtained 
a quantity of information from Mr. W. R. Lawrence, C.I.E., C.S., the Settle¬ 
ment Officer, from Colonel Neville Chamberlain, the Military Secretary to 
the Kashmir Government, and from General De Bourbel, R.E., (retired) Chief 
Engineer of the State. My account of the land revenue arrangements in 
Kashmir and the method of collecting the land revenue paid in kind is taken in 
parts almost verbatim from Mr. Lawrence’s notes and settlement reports. I 
consulted the administration and settlement reports freely, and enquired into every 
branch of the administration with the assistance of the responsible Heads of the 
Departments. Each Member of the Council furnished me with a copious memo¬ 
randum, stating his views regarding the administration and more especially in 
regard to improvements in revenue and reductions in expenditure. A similar 
memorandum was sent to me by the Governor of Kashmir, Sardar Rup Singh, 
from which I derived a considerable amount of information. As regards the 
Account Office, theDaftar Diwani, I investigated its working along with the head 
of the office, going through the books and accounts and enquiring into the 
procedure m force. I also had an interview with the Civil Accountant General 
of the State—an officer whose title is, however, a misnomer, and with whom one 
interview exhausted all the information he was able to furnish regarding the 
State accounts.. Every official of the State with whom I came in contact appeared 
to be most anxious to assist me with all the information in his power, and I was 
particularly struck by the intelligence usually displayed. At the same time, 
however, the general knowledge of the State shown by many of the officials was 
not of a wide or accurate nature, and while they admitted and deplored its financial 
difficulties the remedies suggested bore evident marks of having been hastily con¬ 
sidered, and were usually hardly worth listening to. 


4. The territory comprising the State of Kashmir and Jammu including 

Area and boundaries of ^ unc ^’ a feudatory State, and Ladakh and Baltistan 
Kashmir. has an estimated area of 81,000 square miles. The 

State is bounded on (the north by some petty semi- 
mdependent hill chiefships, mostly subordinate to Kashmir, on the east by 
Chinese Tibet, on the south and west by the Panjab districts and the Hazara 
territory The State comprises in addition to Kashmir proper, Jammu and 
Punch, Ladakh and Gilgit, including the districts of Dardistan, Baltistan or 
Vnnu Tilafl, ISuru, Zanskar and others. Three main rivers, the Jhelum, 

the Chenab and the Indus, traverse the State, Kashmir proper and Punch 
occupying the valleys drained by the Jhelum, and Jammu and its provinces the 
valleys drained by the Chenab. Ladakh and Baltistan (Skardo) are drained by 
the Upper Indus. Kashmir proper occupies a central position with Baltistan 
°V.^ north ’ Jammu on the south, Ladakh on the east and Punch on the west, 
and it forms a large basm at the head of the Jhelum Valley encircled by the Pir 
Punjai range, which divides it from the Chenab Valley on the east and south 
and from the Kishenganga and Punch valleys on the west. 


5. The total population of the State by the recent census is 2,543,952 
Population. pesons. The population of Jammu is 1,088,676, of 

Kashmir proper 949,041, of Ladakh 28,274, Skardo 


3 


^tJL 68 ’ 608 . Ramna g ar 49,826, and Badra- 
Anw 2 ^ 3 ?*!!,-? f th ?J°^ 1 1 ’ 793 ^ 10 are Mahomedans, 691,800 Hindus, 
29,608 Buddhists, and 11,399 Sikhs. The castes in G-ilgit have not been speci- 

t0Wn ; are Srmagar (population 118,960), Jammu (population 
34,542) Anantnag (population 8,458), Punch (population 7,489), Mirpur 
(population 7,253) Sopar (population 7,054), and Baramulla (population 5,656). 
Ihe total population according to the census of 1873 was only 1,534,942 so 
that an enormous increase is shown, the result probably of more accurate 
, the recent census - Sri nagar has lost about 4,000 persons since 
AT 9, i l e r '7 mdu ^ are most numerous in Jammu; in all other portions of the 
otate the Mahomedans have an immense preponderance. 

6. Kashmir was conquered by the Emperor Akbar in a.d. 1586 and 
History became an integral part of the Moghal Empire. In 

V IV x-n mi 17 ? 1 2 1 it was subjugated by the Afghans and retained 

by them till 1819. Ihe Sikhs next conquered the country, and from 1819 

until the Sikh War of 1845 it was ruled by a Governor appointed by the 

.ToJiw ? e . Pan i ab - Pbe principality of Jammu had been presented 
m 1820 to a distinguished soldier named Gulab Singh. Erom Jammu, Gulab 
Singh, nominally on behalf of the Lahore State, soon extended his authority 
over his Baj put neighbours and eventually into Ladakh and Baltistan. He 
ultimately became minister of the Khalsa and took an important part in the 
negotiations which followed the battle of Sobraon. The results were that Gulab 
Singh was able to conclude a separate treaty with the English at Amritsar in 
March 1846, by which, on payment of 75 lakhs of rupees, he was confirmed in 
possession of the territory which he had held as a feudatory of the Sikhs and also 
obtained the province of Kashmir. 


i the treaty of Amritsar Maharaja Gulab Singh bound himself to acknow¬ 

ledge the supremacy of the British Government, to refer all disputes with neigh¬ 
bouring States to its arbitration, to assist British troops when required, and never 
to take or retain in his service any British subject or the subject of any Euro¬ 
pean or American State except with the consent of the British Government. 

Maharaja Gulab Singh died in August 1857 and was succeeded by his eldest 
surviving son Maharaja Banbir Singh, G.C.S.I. Maharaja Banbir Singh died in 
September 1885 and was succeeded by his son Maharaja Pertab Singh, the present 
Maharaja. In 1888 the Maharaja proposed the formation of a consultative 
Council and early in 1889 the present Council was formed and assumed charge 
of the Government of the State. The Maharaja has no son, but has two brothers, 
Baja Bam Singh and Baja Amar Singh. Baja Bam Singh has a daughter, who 
has been in a way adopted by the Maharaja. Baja Amar Singh has a son a few 
months old. 


7. The people are of the most peaceful disposition. Crime is rare, though 
Character Of the people. on the increase owing to the opening out of the 
country and immigration, more especially of Pathan 
labourers from Hazara to work on the Jhelum Valley and Gilgit roads. But the 
Kashmiri is essentially a peaceful individual and lives on terms of great amity 
with his neighbours. The absence of ill-feeling between the Hindus and Maho¬ 
medans is particularly remarkable. I have heard it attributed in a great 
measure to the stern prohibition of cow-killing in the State, which removes what 
is a constant and ever-present cause of enmity between Hindus and Mahomedans 
in British India. 


8. The trade of Kashmir is almost entirely with the Panjab and Ladakh. 

Trade. The exports to the Panjab consist of rice, fruits, ghi, 

hides, oil-seeds, timber, wool and sheep; the imports are 
wheat, gram, sugar, salt, hardware, piece-goods, tea, snuff, tobacco, kerosine oil, 
and metals. The value of the Kashmir trade with the Panjab in 1890-91 was 
nearly 113 lakhs of rupees, with Ladakh upwards of 6 lakhs of rupees. These 
figures do not, however, include the rail-borne traffic between Jammu and Sialkote, 
which is not registered, and cannot in consequence adequately represent the 
entire trade of the State. 


4 


Trade routes and means of 
communication. 


9. The chief means of communication with the Panjab are by (I) the 
Banihal route from the railway near Jammu to Srina¬ 
gar by the Ohenab valley, 163 miles; (2) the Punch 
route from the town of Jhelum to Srinagar by the 
Punch valley, 198 miles; (3) the Panjar route from Rawalpindi to Srinagar by 
Punch and the Jhelum valley, 180 miles; (4) the Abbottabad route from Kala 
Ke Serai to Srinagar through Hazara and the upper Jhelum valley, 210 miles; (5) 
the Jhelum Valley route from Rawalpindi to Srinagar via Murree, Kohala and 
Baramulla, 195 miles. This last route, the Jhelum Valley route, is destined to 
be by far the most important route for all purposes. By means of it tongas and 
carts can travel from Rawalpindi to Baramulla on the Jhelum, a distance of 165 
miles, over a good road with easy gradients. An extension of the road from 
Baramulla to Srinagar, 34 miles, would be quite easy to construct, if money 
were available. Towards Central Asia a road 230 miles long, which will, it is 
hoped, be passable for light carts, is being constructed to Gilgit on the northern 
frontier of the State. There is also a fairly good road, 259 miles long, from 
Srinagar to Leh in Ladakh. At present the most important trade route is 
probably the Banihal from Srinagar vid Islamabad to Jammu, but this route is 
being superseded by the Jhelum Valley route. 


10. The construction of a railway into Kashmir has been under consi¬ 
deration for some time and various surveys of the 
Railway into Kashmir. different routes into the valley have been made. The 
Panjar and Banihal routes are stated by General He Bourbel, R.E., (retired), 
the Chief Engineer of the State who has conducted most of the detailed surveys, to 
be the most favourable. The cost as estimated by General He Bourbel of a metre 
gauge railway by the former route is 250 lakhs of rupees and by the latter route 
350 lakhs of rupees. It is further estimated that 6 and 9 years respectively must 
elapse before the line will pay. General He Bourbel has further informed me 
that a syndicate of English capitalists has proposed to undertake the construc¬ 
tion of a railway by the Banihal route, I believe, without any guarantee by the 
Government of India or the Kashmir State, but I have no information regard¬ 
ing the details of the scheme. 


11. Huring the course of my enquiries I have investigated with some care 

the statistics of the surplus food grains and produce 
e ^rfaTdoubtful Btatistics • which would be available for export from Kashmir 
as given in General He Bourbel’s general report on the 
Kashmir Railway survey. General He Bourbel, as I understand, reckons on 
200,000 imperial maunds of grain, chiefly unhusked rice, and an equivalent 
quantity of oil-seeds, cotton and other produce as being available for export. I 
am, however, very doubtful whether these statistics are to be depended on. 

The total population of the State by the last census is upwards of a million 
in excess of the figures given by General He Bourbel from the census of 1873, and 
the population of Kashmir proper is upwards of 90 per cent, greater than it was 
according to the census of 1873. Under certain conditions a larger population 
would indicate a larger surplus of food grains and produce for export, but so far 
as Kashmir is concerned it seems probable that in so far as the increase shown 
by the last census is due to an actual increase in population and not to more 
accurate computation, such increase has actually diminished the stock of food 
grains and produce available for export. 

12. It is a notorious fact that year by year more difficulty is experienced 
in obtaining “ shali ” (unhusked rice) for the population of Srinagar, and. that the 
tendency is for the cultivators to pay more of their land revenue in cash and less 
in kind than heretofore (see paragraphs 83 and 92). There is no good ground for 
supposing that the revenue in kind, chiefly coarse red unhusked rice, thus retained 
by the cultivators is exported, and the only reasonable conclusion is that it is 
consumed in the State. Eurther, it is, I think, very doubtful whether the rice 
which is chiefly grown in Kashmir at present would, even if available, pay to 
export except in times of scarcity in India. I am not well acquainted with the 
different varieties of rice, but it is a well-known fact that natives of Kashmir who 
are able to afford Panjab rice will not touch the ordinary rice grown in the country, 
and that it is only eaten by persons who cannot obtain a better sort. The wheat also 


5 


is said to "be much inferior in quality to good Indian varieties. There can he no 
doubt that better rice and wheat could be grown, and in much larger quantities, 
than at present. It will, however, take some time to introduce better varieties 
and to improve the present slovenly methods of the Kashmir cultivator. 

The breaking up of waste land is also a slow process. 

The timber trade of Kashmir is large and will, I believe, increase. It is, 
however, very doubtful whether the railway could ever compete with the 
existing carriage by the Jhelum and its tributaries. 

13. It must, of course, be admitted that the larger the population the 
larger should the number of passengers be who would travel by the railway, 
and from this point of view an increase of a million in the total population of 
the State, or of upwards of 450,000 in the population of Kashmir proper, is 
a favourable feature. It should, however, be remembered that the bulk of the 
population is miserably poor and averse to travel. 

14. I am quite certain that, if it is ever seriously proposed to build a 
railway into Kashmir as a mercantile speculation, the existing statistics of trade 
should be subjected to careful examination before they are accepted as correct. 
My personal opinion is that they are not to be depended on. 


15. The construction of a railway for military purposes is a different 
matter. The profit measured in rupees on the 
rai way or t . a p^ a i ex p ent [ed might be extremely small, and yet 
the railway might be of the utmost value from a 
military point of view in adding to the security of the Empire. 


Route for 
military purposes. 


I am inclined to think that, if it is ever deemed necessary to construct a 
railway primarily for military purposes, the Banihal and Panjar routes will be 
rejected and it will be found more advantageous to follow the Abbottabad route 
from Kala Ke Serai or Attock vid Abbottabad and Garhi Habibulla, the'Jterminus 
of the line being at Muzaffarabad or Domel. So far as the trade of Kashmir is 
concerned a line to Domel would probably suffice for a good many years to come, 
and if it is found to be feasible to construct an alternative road to Gilgit from 
near Domel by the Khagan or Kislienganga valleys, a railway to Muzaffarabad 
or Dome! would probably suffice for all military requirements. It seems quite 
possible that the line of the Kishenganga valley might lead to a safer access 
to the valley of Kashmir for a railway than any of the routes hitherto surveyed. 


16. There are two crops in the year, the rabi and the kharif. The rabi 
Crops and produce. ripens in June, the kharif in October. The rabi crops 
are wheat, barley, peas, oil-seeds, dal, &c. The kharif 
crops are rice, Indian corn, several minor food grains, and cotton. Grapes, 
apples, pears, peaches, mulberries, pomegranates, figs, quinces, walnuts, raspberries, 
strawberries, plums, apricots, almonds and nuts are grown, some in great abund¬ 
ance, many kinds being wild. Saffron is a valuable product, as is also the £ Kut ’ 
or Orris root, which is gathered on the hills and exported to China, where it is 
used for making Joss sticks. Excellent hops are grown and enormous quantities 
of the Singhara nut are obtained from the Wular and Dhul lakes. The forests are 
most valuable, the Deodar, Chil (pinus longifolia), Yar (pinus excelsa), Chenar, 
Yew, Elm, Cypress, Poplar, wild Chestnut, Willow and Birch being found, some 
in great abundance. Almost all well-known garden vegetables are grown freely, 
the cucumber and melon being grown in large quantities in the floating gardens 
which form so curious a feature of the Dhul lake. 


The minerals are numerous. Coal, iron, copper, sulphur, lead, antimony, 
borax, silver and gold have been found. The State possessed a valuable sapphire 
mine in Zanskar, which has, however, been destroyed by a landslip. 


17. The manufactures of the valley are chiefly shawls, carpets, woollen 
cloths, blankets, paper, papier-mache or lacquered work 
Manufactures. and gold, silver and brass work. Wine and cider are 

made and there is a silk factory at Srinagar. 


18. The rainfall appears to be from 20 to 24 
Rainfall. inches. 


con 14^0—2 


6 


( 


19. Rice forms the staple food of the people, hut various minor food 
. grains are largely eaten. Vegetables and fruit also 

Food of the people. enter largely into the dietar y of the people . 


20. It should be noted that these remarks apply chiefly to Kashmir proper, 
, which is in many respects very different from Jammu 

chMy'To'Kashmhprop^™^ 011 the °? e hand aud Gil S it; and ^tdakh on the other. 

Jammu is so close to the Panjab, and comparatively 
speaking so prosperous, that its condition is in marked contrast to that of Kash¬ 
mir. The cultivator in Jammu, if dissatisfied with his lot, can easily migrate to 
the Sialkote or some neighbouring district of the Panjab. But Kashmir, shut 
in by lofty mountain ranges, is in a totally different position. Emigration is for 
several months of the year almost an impossibility, and in any case the mass of 
the population have neither the energy to emigrate to the Panjab nor the means 
of doing so. They subsist chiefly on rice and rice is not a staple in the Panjab. 
They dislike the heat of the plains and love their own country. Hence emigra¬ 
tion has been sparingly resorted to. Some of the Kashmiri Pandits have emi¬ 
grated to India and have done well there, and a few shawl weavers are to be 
found in large cities like Amritsar. But as a general rule the Kashmiri is a 
thorough stay-at-home. 


21. As regards immigration, there has recently been a large influx of 

. Gujars, 3,000 families, it is said, from Punch into 

mmigra ion. Kashmir proper. A few small traders from India have 

also found their way into the valley. But the same causes which have obstructed 
emigration have also hindered immigration, and it is somewhat remarkable to 
find so few foreign faces, always excepting the ubiquitous Parsi, in a large and 
noted city like Srinagar. 

22. The State Council is composed of five members. Raja Amar Singh, the 

T , „ r youngest brother of the Maharaja, is President of the 

Council and holds charge of the Eoreign Department. 
Raja Ram Singh, younger brother of the Maharaja, is Commander-in-Chief of 
the army. Rai Bahadur Pandit Suraj Kaul, C.I.E., is in charge of the Revenue 
Department, including Excise accounts aud Forests. Rai Bahadur Pandit Bhag 
Ram is in charge of the Judicial Department, including Law and Justice, Jails, 
Education, Medical and Public Works. Khan Bahadur Sheikh Gliulam Mohiu- 
din is in charge of the General Department, including Post, Telegraphs, Police, 
Stables, the Press and Municipalities. Pandit Bhag Ram is also the Secretary of 
the State Council. Raja Amar Singh, the President of the Council, is considered 
to be by virtue of his office the executive head of the administration. He is 
the custodian of all State documents and signs all orders for the withdrawal of 
moneys from the Reserve Treasuries when such withdrawals have been duly 
sanctioned by the Council. An appeal from the orders of the other members of 
Council can also be made to him in certain circumstances. 


Raja Amar Singh appeared to me to be a young man of considerable ability 
and great industry. He has probably certain private aims in view, but he seem¬ 
ed to be honestly desirous of serving the State to the best of his ability. His 
power in the Council is practically unlimited. If he approves of any measure 
it will certainly be carried, if he disapproves he can cause delays and postpone¬ 
ments which are usually sufficient to render any measure nugatory. Rightly or 
wrongly, the Revenue, Judicial and General members of the Council have 
permitted the President to usurp a large portion of the authority which belongs 
of right to their offices, and to reduce them to a position far inferior to what thev 
should hold. J 

I have not seen so much of Raja Ram Singh, the Commander-in-Chief, as of 
the other members of Council, as he has been absent for a considerable time on 
tour. His health is indifferent and he suffers from an impediment in his speech. 
He seems to be fond of his work and very anxious to do his best for his countrv' 
He has the reputation of being rather extravagant. ^ * 

Rai Bahadur Pandit Suraj Kaul, C.I.E., is an old and respected official of 
the British Government. He did good service in Beluchistan and would willing¬ 
ly do good service in Kashmir, but he has lost his energy and activity, has fail¬ 
ed to assert his proper position and authority, and is greatly afraid of being ill 


7 


spoken of. He appears to fear that malicious stories may be invented to his 
disadvantage and that thereby a stain may be cast on his former meritorious 
service. Hence, rather than assert his position he has allowed matters to take 
their course and has permitted his authority to be questioned and in some 
instances absolutely ignored. He has stated that he has not received support in 
periods of difficulty, meaning, apparently, from his colleagues and from the 
Resident. But he admitted that he had never once brought his difficulties to 
the Resident’s notice, even when his authority and orders were absolutely dis¬ 
regarded. His health has not been good for some time past, but is now much 
better. 

Rai Bahadur Pandit Bhag Ram did excellent service as Judicial Extra 
Assistant Commissioner in Ajmere and is a man of intelligence and ability. I 
have not seen so much of his work as of that of the other members of Council, 
but I believe he has introduced several reforms in the judicial work of the State, 
though the results are not perhaps as yet all that might be desired. Pandit 
Bhag Ram.is a firm supporter of Raja Amar Singh and fully admits this, stating 
that he follows the only line of conduct by which he is able to carry out his own 
ideas in his own department. His health has recently been very bad, and it 
seems doubtful whether he will ever fully recover. At present he is quite 
incapable of going on tour or of performing his ordinary work except at his 
own home. 

Khan Bahadur Sheikh Gliulam Mohiudin is an officer who did good service 
as a Tahsildar and Extra Assistant Commissioner in the Panjab. He is a 
younger man than Pandit Suraj Kaul or Pandit Bhag Ram. His intelligence 
is fair and he is very industrious. But it appears to me to he doubtful 
whether he is the stamp of officer wdio is required in the State Council. He 
would make and has made an excellent Tahsildar and Extra Assistant Commis¬ 
sioner, but he scarcely seems fitted for independent charge of a difficult depart¬ 
ment. He is active and his health is good, so that when told off for particular 
duty and properly instructed he performs his work with zeal and thoroughness. 
But this seems to be the limit of his power and he has willingly acquiesced in 
Raja Amar Singh’s assumption of general control and authority. 

23. It will be seen from these remarks that I do not consider the Council 

to be a very successful institution. The three mem- 
The future of the Council. |j ers imported from India are far too much in the 

position of heads of departments subordinate to the President of the Council, 
and considering the comparatively small amount of work they have to perform 
the results are, I think, disappointing. I am of opinion that a Council composed 
of three members could with ease dispose of all the work at present performed 
by the five members, and if the third member, the other two being Raja Amar 
Singh and Raja Ram Singh, were an officer of ability and intelligence, that many 
improvements might be effected. But it does not therefore follow that I 
advocate any immediate change in the constitution or composition of the Council. 
I feel more inclined to suggest that when the time comes for any of the British 
officials to retire, it will be time enough to consider the future of the Council. 
According to the statements made by the members themselves they have not 
hitherto had a full and fair opportunity of showing what they could do. The 
former Resident, Colonel Parry Nisbet, in his anxiety to push on reforms, 
appears to have been somewhat inclined to put the Council on one side, and 
since his departure on leave two of the members have for a considerable period 
suffered from bad health. I think, however, that now, especially after the visit 
paid to Kashmir by His Excellency the Viceroy, the Council will display more 
vigour and carry out many much-needed improvements, particularly in the 
revenue administration of the State. 

24. The position of the Maharaja in relation to the Council and the State 

requires a few remarks. Nominally His Highness 
The Maharaja. h as no power, but in reality he is a great power in the 

State. He is a man of some dignity and considerable intelligence and shrewd- 
. ness. He is, however, surrounded by low favourites, and is religious to the verge 
of abject superstition. His personal habits appear to be of the most simple 


nature, but the waste and extravagance of his servants and followers are un¬ 
bounded. As sole ruler he is, I fear, entirely out of the question, but his shrewd¬ 
ness and experience would, in my opinion, be of much service to the State if he 
had a consultative voice in the deliberations of the Council, especially in revenue 
matters which he is said to understand thoroughly. It is possible that he would 
entirely refuse to accept any such position. I believe, however, he has no desire 
to undertake the duties of sole ruler, and that he was honestly willing to sur¬ 
render the duties of governing the State to a Council. But it seems to me that 
he never intended or expected that his youngest brother would become de facto 
ruler of the State, and that he resents Raja Amar Singh’s position. It must at the 
same time be remembered that Raja Amar Singh is the only member of the 
Maharaja’s family who has shown any capacity for government, and that if he 
were set aside or refused to accept any position other than that which he now 
holds, a very serious difficulty in carrying on the Government of the State would 
have to be faced. 

25. The system of administration may be brief!v 
The system ot administration. deseribed as follows 

There is a Governor in Jammu and also in Kashmir. The Governors are 
high officials, subordinate to the Council alone. In Jammu there are 5 and in. 
Kashmir 4 Wazarats, each in charge of a Wazir. The Wazir corresponds to a 
certain extent to the Deputy Commissioner in the Panjab, and the Governor to 
the Commissioner. The Jammu Wazarats are (1) Wazarat Khas (Jammu), (2) 
Manawar, (3) Riasi, (4) Udhampur, (5) Jusrotah. The Kashmir Wazarats are 
(1) Wazarat Shahr Khas (Srinagar), (2) Anantnag, (3) Kamraj, and (4) Pahar. 
In addition there is the Governorship or Wazarat of Gilgit and the Wazarats of 
Ladakh and Askardu or Skardo. Each Waziarat is divided into Tahsils, of which 
there are 18 in Jammu and 18 in Kashmir. There are no Tahsils in Gilgit, 
Ladakh and Askardu. The Tahsildars, who are generally assisted by a Naib, 
have usually civil, criminal and revenue powers. The Revenue Member of 
Council is the Supreme Revenue Court, the Judicial Member of Council the 
Judge of the High Court. There are also, both in Jammu and Kashmir, a Chief 
Judge, a Joint Judge, a City Judge, and some Munsifs, but the Munsifs are 
being gradually brought under reduction. The Police in Jammu consists of 28 
officers and 567 men, in Kashmir of 31 officers and 417 men. There are two 
jails, one at Srinagar and one at Jammu, the average jail population in each 
being between 160 and 170. 

There is a high school at Jammu and a middle school at Srinagar. There 
are 7 village schools in Jammu and one primary sohool in Kashmir. 

There are two Municipalities in the State, one at Jammu and one at Srinagar. 
Both were established about three years ago. The Jammu municipal committee 
is composed of 4 official and 12 non-official members, at Srinagar of 5 official and 
11 non-official members. The pay of the Governors is Rs. 1,000 a month in 
Jammu and Rs. 1,200 a month in Kashmir. The Governor or Wazir of Gilgit 
until quite recently received Rs. 625 a month. The Wazirs receive from Rs. 200 
to Rs. 312 a month, and the Tahsildars from Rs. 40 to Rs. 100 a month, 

I give in an appendix (No. I) to this report a statement showing the names 
and pay of British officers in Kashmir State service* The statement does not 
include my own name, as my deputation is temporary. 

I think it may fairly be said that all the European and most of the Native 
officers lent by the Indian Government have been a distinct acquisition to the 
State. 

A few, however, of the Native officers in foreign service, Mahomedans espe¬ 
cially, have not proved very successful; for example, Mahomed Akbar Khan, 
Inspector General of Police, and Mahomed Afzul Khan, Deputy Governor of 
Kashmir. It seems to me to be doubtful whether Mahomedan officers lent to 
the State are likely to succeed in independent positions for some time to come. 
When working in subordination to a European officer they do well, but when 
thrown on their own resources they are unable to overcome the passive resistance, 
to say the least of it, which the large body of Hindu officials in the State oppose 
to them. Their work accordingly proves to be very disappointing and their 
influence for good disappears, 


9 


26. Considering the area, revenue and population of Jammu and Kashmir 
.... . _. . . proper, the division into Governorships, Wazarats and 

op^r-“e^ Vl81 ° nS Tahsils would seem t0 be °P en to improvement. If the 

Governorships are retained, the number of Tahsils and 
Wazarats might he reduced with increased efficiency. The distribution of some, 
-of the existing Tahsils is very unsatisfactory and has been made with little re¬ 
gard to the conformation and natural boundaries of the country, more especially 
in Kashmir. A reduction in the number of Tahsils would justify a reduction 
in the number of Wazarats, to be accompanied by an increase to the extremely 
low pay now given both to Tahsildars and Wazirs. Another re-arrangement 
would be to reduce the number of Tahsils and to divide Jammu and Kashmir 
into four Wazarats, getting rid of the Governors and paying the Wazirs from 
Us. 800 to Rs. 1,000 a month. Some re-arrangement is, I believe, very neces¬ 
sary, but the exact details, as far as Kashmir proper is concerned, may be left 
over for decision when the settlement has been completed. The Settlement 
Officer will then be able to indicate the most advantageous re-arrangement of 
existing Tahsils and Wazarats. In Jammu the matter can be taken up at once. 
Both the Revenue Member of Council and the Governor are of opinion that 
existing arrangements can be greatly improved without any additional expense. 
There can be no doubt whatever that both Tahsildars and Wazirs are insuffi¬ 
ciently remunerated for their important duties, that they receive their pay at 
irregular intervals, and that the natural consequences—misappropriation and 
peculation of the money of the State—are very common. 


If. however, these officials were properly paid, and if an example were made 
of men who were then guilty of embezzlement, I believe that a fair standard of 
honesty could be secured. The Kashmiri officials are intelligent and willing to 
work, and I tfcelieve that with proper treatment they might be turned into as 
able and honest officials as any in India. Of one thing I am quite sure, and that 
is that the regeneration of the country must be worked out by its own people. 
The example and assistance of British officials are of the utmost value, but com¬ 
paratively speaking small progress will be made until the Kashmiri official is 
himself convinced that honesty is the best policy. 


27. I was for a considerable time under the impression that there was no 
Account and Audit Department in the State. Pay- 
The Accounts Department. men t s appeared to be made and recognised as correct 

which no properly constituted Audit Department would have admitted in audit, 
and the assistance which the Account Department in India is bound to render to 
the Revenue authorities in helping them to check receipts is here conspicuously 
absent. So far as I have been able to learn, the account system is a mixture of 
the native and English systems. One or two trained Accountants from Account 
Offices in India were appointed to the Civil Account Office of the State, the 
Daftar Diwani, a few years ago, and they introduced a few of the Account and 
Audit Registers maintained in Indian Account Offices. This, however, was of 
very little use; in fact, these registers introduced an element of confusion 
which formerly did not exist. 

28.. The accounts of the State are kept by the Civil Account Department, 
the Daftar Diwani, in Persian,not unfrequently on loose 
The account system. sheets of paper. Accounts are received at irregular 

intervals from the Wazirs and incorporated in what aie, at the best, neither more 
nor less than the ordinary merchants Bahikhata (account books)., of India. 
A number of neatly bound volumes of accounts were produced for my inspec¬ 
tion in addition to the "Bahikhata,” each containing certain information re- 
o-airdin«' which I had made enquiries. One volume, for example, was a “ detail 
book ’’^showing the receipts and expenditure classified by Wazarats for the first 
four or five months of the year. These books struck me as being too new and 
too clean for everyday use, and on enquiring when they had been opened I w r as 
told with perfect frankness that they had been opened some 10 or 12 days before 
I saw them, as it was understood J desired to see them ! Eor the rest the 
accounts of the State are to all intents and purposes kept in a cash book and 
ledger and receipts are classified by the Mohurrirs, sometimes correctly, some-. 
times incorrectly. 
con 1420—3 


10 


29. The accounts are kept "by the Samvat year. The first month of the 
official year is Bysakh and the year usually begins 
about the 10th or 11th of April. The last month is 
Chait, corresponding to March-April. To all intents 
and purposes the Kashmir official year corresponds with the Indian official year. 


Accounts kept 
Samvat year. 


by the 


ence, 


30. I have not been able to ascertain that account rules of any sort or 
. kind are in force in the State. The Civil Account Office 

o account iu es m exist- - g q U jte unable from* want of knowledge to instruct the 

Wazirs or Tahsildars in their account work. Each 
Wazir obtains such accounts as he can of receipts and expenditure from his 
Tahsildars, and sends the accounts of his Wazarat at irregular intervals, but 
nominally once a month, to the Daftar Diwani through the Governor. The 
Daftar Diwani does not concern itself with any transactions not formally 
reported to it, calls for no returns, and is simply a passive recording office of 
account. 


31. As regards audit, the Public Works and Military Departments audit 
their own expenditure. In the Civil Department the 
ie uci epaitmen following is the procedure. Two copies of, for example, 
a salary hill are made out by the head of an office. These are first sent to the 
Daftar Diwani, where they are examined, passe d and signed by a clerk and by the 
head of the Account Office. The two bills are then taken to the Governor, who 
signs and seals them. They are then registered in the Governor’s office. The bills 
are then returned to the Account Office, where they are signed a second time 
and sealed. One copy is retained in the Account Office, the other copy is 
then taken to the Deputy Governor, who is the Treasury Officer. Payment 
may he made at once if money is available, but may not he made for weeks or 
months or even for years. However, when paid the bill is stamped and 
receipted and made over to the Treasury. The system in the Public Works and 
Military Departments is better and more nearly approaches the Indian system. 
But the Military Secretary is obliged to maintain an establishment in his own 
office to audit bills passed by the Military Accountant General and the audit 
office in the Public Works Department is under the Chief Engineer, an obviously 
unsatisfactory arrangement. There are only two Sadar or Head-quarters Trea¬ 
suries, one at Srinagar and one at Jammu, but there are sub-treasuries at the 
head-quarters of each Wazarat and Tahsil, except at Srinagar and Jammu. 
At Srinagar there is also an arrangement for receiving revenue paid in kind. 


Receipts and payments of 
money. 


32. All receipts in cash are accompanied by what is called an “ Arz Irsal ” 
which gives details of the money paid into the trea¬ 
sury. Payments are made (1) on bills passed and 
signed by the Governors or auditing officers, (2) on 
cheques (Tunkhas) issued by the Daftar Diwani and endorsed for payment by 
the Governor, (3) on ordinary payment orders or letters issued by the Governors, 
and (4) in emergent cases on telegraphic orders. In the last two cases the 
money, though actually paid, is not debited in the list of payments until a formal 
cheque (Tunkha) has been issued—an arrangement quite sufficient to ruin the 
accounts of any account office. 


.33. The head of the Daftar Diwani in Kashmir at any rate, for there is 
m, n , . another Daftar Diwani at Jammu, is not a skilled 

Reveuue Member’s office. ** Accountant. The person called the Civil “ Account¬ 
ant General ” does or can do (in the opinion of the 
Revenue Member) “ nothing at all.” Under these circumstances whatever value 
the accounts possess must result from the examination to which they are sub¬ 
jected by the chief controlling officer, the Revenue Member. The officials in 
the Revenue Member’s office, though willing, are unskilled in account work and 
procedure, and the result is that the accounts are in a very unsatisfactory con¬ 
dition. They are not in the least trustworthy. Mistakes, sometimes of. a serious 
nature, are not uncommon. The preparation of an accurate balance sheet is 
an impossibility in the present state of the accounts. The classification of 
receipts is defective in the extreme. It is impossible from the accounts as 
they stand to ascertain the receipts and charges of particular departments, 


11 


€.g.,' the Forest, Postal, Telegraph, Judicial, or Excise Departments, &c. A 
considerable portion of the receipts are classified as Miscellaneous, which should 
properly be classified under other heads of receipt, and items of expenditure are 
classified under one head which properly belong to another. 


34. The Budget system is extremely faulty. The revenue estimates are 
The Budget system. furnished by the Governors, hut very little is done 
to check or test their estimates with the figures of 
past years and the probabilities of the next year. The estimates furnished by the 
Governors are not accompanied by proper explanatory notes or memoranda, and 
are often based on imperfect or incorrect information. 


35. As regards expenditure, little or nothing is known by the Council 

Budget Estimates of ex- the probable expenditure of next year until 

penditure. the departmental budget estimates are submitted 

by the Revenue, Judicial, General, Public Works, 
and Military Departments. New charges are included in the estimates without 
previous sanction. The actuals of previous years and the progressive expendi¬ 
ture of the current year are not clearly exhibited. The amount which is expected 
to be actually paid or received during the year is not usually the basis of the 
estimates, but the liabilities or demands which are expected to fall due within 
the year. Not only ordinary arrears, but arrears of several years back are 
brought into the estimates without any proper explanation and without any well- 
grounded expectation that these liabilities will or can be discharged during the 
year. Budget grants do not lapse at the close of the year, but savings are carried 
over as sums due by the State to particular departments, or balances in hand to 
the credit of Departments, such balances being often kept outside the State 
Treasury. Budget grants are in some instances exceeded without the slightest 
scruple, and an excess at the end of the year may be carried forward as a debt 
due by the State to a particular department in the next year’s budget. Lastly, 
expenditure not provided for in the budget is freely sanctioned in the course 
of the year, not unfrequently by the President of the Council on his individual 
authority. 


36. It is not quite easy to ascertain the cost of what in India would con- 
. . stitute the Account and Audit Department of the 

Audit Department. 001111 State - The following is, however, correct or nearly so. 

If anything, the actual cost is slightly in excess of 
what is here shown, as some clerks, who are really Account clerks, appear under 
other designations in the books of the State :— 


Pay per month. 



Rs. 

a. 

P- 

Public Works Department, Audit Office — 




1 Audit Accountant ... 

.. 200 

0 

0 

1 Assistant 

... • 100 

0 

0 

2 Clerks on Rs. 40 and Rs. 20 

... 60 

0 

0 

1 Daftary ... 

.. 10 

0 

0 

2 Peons 

... 12 

0 

0 

Total per annum 

... 4,584 

0 

0 

Travelling allowance and contingencies 

... 916 

0 

0 

Military Department — 




1 Accountant General... 

... 125 

0 

0 

1 Assistant Accountant General 

... 40 

0 

0 

8 Clerks from Rs. 35 to Rs. 15 

... 230 

0 

0 

1 Daftary ... 

... 15 

0 

0 

Military Secretary’s Office — 




1 Head Auditor 

.. 200 

0 

0 

2 Audit Clerks on Rs. 35 and Rs. 25 

60 

0 

0 

1 Ledger-keeper 

.. 50 

0 

0 


Per annum. 
Rs. a. p. 


5,500 0 0 


4,920 0 0 


3,720 0 0 


Carried over 


14,140 0 0 










12 


Pay per month. Per annum. 


Jammu : Accountant General —- 


Rs. a, p. Rs. a. p. 
Brought forward ... 14,140 0 0 


1 Accountant ... 

„ 125 

0 

0 

1 Reader and 1 Sardaftary 

80 

0 

0 

Contingencies .. 

,.. 20 

0 

0 

Jammu: Governor’s Office (Daftur Diwani )— 




1 Accountant ... .., 

... 250 

0 

0 

1 Assistant 

... 50 

0 

0 

Ahlmads.,. 

... 50 

0 

0 

Moharir ... 

... 410 

0 

0 

Daftar Kusha 

... 15 

9 

4 

Moharir and copyist .. 

... 31 

4 

0 

Jemadar and sepoys ... 

... 36 

0 

0 

Miscellaneous charges 

... 191 

8 

0 

Kashmir : Governor’s Office ( Daftar Diwani)-^ 




1 Accountant 

... 300 

0 

0 

1 Assistant 

50 

0 

0 

Moharirs, Nazirs, &c. 

460 

6 

8 

English Clerk 

... 30 

0 

0 

1 Jemadar and 6 Chaprasies 

... 30 

0 

0 

Shoe-keeper 

3 

2 

0 

Miscellaneous charges 

... 110 

0 

0 

Add yearly charges 

... 308 

0 

0 

Foreign Department — 




1 Civil Auditor (Accountant General) 

... 500 

0 

0 

1 Clerk ... 

... 30 

0 

0 


2,700 0 0 


12,412 0 0 


12,110 8 0 


6,360 0 0 


Grand Total ... 47,722 8 0 


37. It is difficult to institute a comparison between the Account Depart- 

_ . ... . ment in tips State and any Account and Audit Office 

Account 1 Office? W1 SSaiQ W India, because none of the Indian offices deal with 

so small a revenue and expenditure. 

The revenue and expenditure of the Kashmir State may be taken at (say) 
50 and 55 lakhs of rupees a year. The smallest account office in India is the 
Assam Office, but the revenue and expenditure of Assam according to the 
Budget of 1891-92 amounted to abopt 100 and 67 laklis of rupees, The 
cost of the Account Office in Assam was estimated at Bs. 45,000 in the Budget 
of 1891-92 and the actuals for 1889-90 were Bs. 45,293. The estimates of 
1891-92 allow for a Comptroller on Bs. 1,000 a month, a Chief Superintend, 
ent on Bs. 500, one clerk on Bs. 200, 22 clerks on less than Bs. 200, 8 servants 
and Bs. 2,550 for contingencies, including postal and telegraph charges. In 
some respects there is a certain resemblance between Assam and Kashmir. 
They are both frontier provinces. Sylliet may be compared to Jammu apd 
is as different from the districts on the Upper Brahmaputra as Jammu is from 
Kashmir. Similarly Assam includes or is connected with several distant and 
sparsely populated districts and States as Kashmir is connected with Grilgit, 
Ladakh and the adjacent States. 

38. Considering the elaborate procedure of an Indian account office and 

n . , A .the extreme simplicity, not to say want of system, in 

and°Audit OfficT* ° C0Un the accounts of Kashmir, it is a fair deduction that 

the cost of the Kashmir Account Office should be 
considerably less than that of the Assam Office. I calculate thgt a proper 
Account and Audit Office in Kashmir could be constituted on the followin'* 
scale:— 












13 



Pay per 

Per 


month. 

annum, 


Rs. 

Rs. 

1 Comptroller 

800 

9,600 

1 General Assistant 

300 

3,600 

1 Superintendent ... 

200 

2,400 

3 Examiners (average pay, Rs. 60—120) 

... 

3,240 

15 Auditors (5 for Kashmir and Jammu, 2 for Gilgit 
and Ladakh, 1 for Srinagar, 4 for Military, 3 for 

Public Works and Forests)—average pay Rs. 30 

to Rs. 85 


■8,520 

1 Record-keeper 

75 

900 

2 Copyists 

25 

600 

5 Chaprasies 

6 

360 

Contingencies (postal and telegraph charges, purchase 

and repair of furniture, &c.) 

... 

2,000 


Total 

. 31,220 


I believe this establishment would be ample for a thoroughly efficient 
Account and Audit Office in the State. If necessary, two clerks to translate Persian 
.accounts into English on Rs. 50 a month each could be added and the State could 
well afford to pay its Comptroller Us. 1,000 a month if a thoroughly efficient 
man could not be obtained for Ps. 800 a month. This would add Ps. 300 a 
month to the cost shown above, making the total Ps. 34,820, or say Rs. 35,000 a 
year, a saving of nearly Ps. 13,000 a year on the present cost of the Account 
Department of the State. 

39. The question of the recruitment of the new office is one of great 
. importance and some difficulty. It is, I hold, absolutely 

■j>o.ed ActSLd Aadit OfE necessary that the Comptroller should be a European, 

thoroughly well versed m the Indian account system, 
and prepared to remain at least three years in the State. Mr. C. R. C. 
Kiernander, at present officiating as Accountant General, Madras, contemplates 
retiring early next year. He is willing to become Comptroller in Kashmir on 
Ps. 1,000 a njonth, with a free house, and would enter into a three years’ agree¬ 
ment. So far as character, ability and knowledge go, Mr. Kiernander is a 
thoroughly efficient officer. He is, however, somewhat advanced in life, and this 
might be a drawback. Mr. G. H. P. Hart, Deputy Accountant General, Bombay, 
is another excellent officer, and I believe that he would accept the appointment 
on the terms specified by Mr. Kiernander. If he did so he would be on foreign 
service. Mr. C. E. Crawley, Assistant Accountant General, Bengal, would also 
accept the appointment on the same terms, and would, I think, give full satisfac¬ 
tion. Mr. G. B. Bleazby, Chief Superintendent, Accountant General’s Office, 
Panjab, is another suitable officer whom I can recommend, but his social status is 
•inferior to that of the officers already mentioned. He would probably accept the 
appointment on Ps. 700 or Ps. 800 a month gross salary. If the scheme I have 
sketched is approved, the Government of India will probably consult the Comp¬ 
troller General, who will be able to recommend a suitable officer and to advise 
the Government of India regarding the officers I have named. 


40. As regards the rank and file of the office, the General Assistant, Super¬ 
intendent, 2 Examiners and 7 or 8 Auditors should be trained men, selected 
from Indian account offices. They need not be Europeans. The rest of the 
clerks should be selected from the existing account offices in the State, but 
this matter should be left very much to the discretion of the Comptroller. It is 
extremely probable that a good selection could be made in Kashmir itself, and 
as it is advisable that as few outsiders as possible should be brought into the 
.office, arrangements could probably be made to send a number of the younger 
men now employed in the account offices of the State to Lahore for a few 
months’ training. The Accountant General of the Panjab would probably not 
.object. 


41. I think the final accounts of the State should be kept in English and 
according to the Samvat year. But they may be kept 
Accounts to be kept in ^ {j ie w azara ts and Tahsils in Persian, as heretofore. 
Enghs an Peismn. jq would accordingly be necessary that the Auditors 


con 1432—4 





14 


in the head Account Office should have some acquaintance with Persian accounts,, 
and that the Account Office should be able to furnish the accounts of the State 1 
to the Council in Persian, if required. 

I think the head Account Office should be established at Srinagar,, but 
for a considerable time to come it is, in my opinion, necessary that the Comp¬ 
troller should spend from 2 to 3 months every year inspecting the account 
offices in Wazarats and Tahsils. He might, however, delegate a portion of this 
duty to his General Assistant. As far as possible the State should provide the 
means of locomotion; for the rest the Comptroller- might be authorised to 
charge any out-of-pocket expenses to his contingent grant, provided it was not 
exceeded. 


42. The establishment of this new Account Office will, of course, prove a 
great relief to the Governors, the Public Works, Mili- 
new^ctount Office hnient ° a tai T and Foreign Departments. The Governors should 
be relieved of all account and audit work, beyond 
those of an ordinary Treasury Officer. If thought desirable, the Treasury at 
Srinagar and at Jammu might be in charge of the Wazir; if so, the Governor 
need not perform the duties of a Treasury Officer. 

48. The unit corresponding direct with the Comptroller should as regards 
. the Civil Department be the Wazir. Por a time at 

thenewAMoSDepartm^ a “7 ^ the account clerks in Wazarats and TahsiS 
should be appointed and controlled by the Comptroller, 
and it would also be advisable that he should have a voice in the appointment 
of account clerks in the Public Works, Military and Porest Departments. As 
regards departments and other offices, each department and each officer at the 
head of an office, e. g., the Chief Engineer, the Military Secretary, the Executive- 
Engineers, the Chief Porest Officer, the Governors and others, should send their 
accounts direct to the Comptroller. Officers in charge of regimental or head¬ 
quarters treasure chests might send their accounts direct to the Comptroller or 
through the Military Secretary as might be deemed advisable. Accounts should 
be rendered twice a month, and a statement showing the treasury balance cash 
in hand, or in a treasure chest, or in any bank, on the last day of the month 
should accompany the accounts rendered at the commencement of the month. 

44. All bills for civil salaries, miscellaneous payments or contingencies 
Audit Of bills at Srinagar. presented at Srinagar should be audited by the Comp¬ 
troller’s office. In regard to the Military, Porest and 

Public Works Departments it would be better to issue monthly letters of credit 
at the instance of the Chief Engineer, Conservator of Porests and Military Secre¬ 
tary, against which all military and public works payments would be debited. 

45. All moneys belonging to the State, whether in State treasuries or in 
Control of state money. India ’ should be managed by the Comptroller, who 

should also keep a record of all personal accounts, 
accounts of charitable funds and the like, and report on them annually to the 
Council. 


Duties of Comptroller and 
Account Office. 


46. The duties of the Comptroller and the 
Account Office should be— 


(1) To prepare accurate monthly and yearly accounts of the State. 

(2) To prescribe a simple set of account and audit rules for observance in 
the State and to ensure the observance of the rules thus prescribed. 

(3) To prepare and submit to the Council the yearly budgets of each 

department with remarks, actuals of the previous year, and actuals of 
the current year up to the latest date possible, with an estimate of the 
receipts and expenditure for the remaining months of the year. 

(4) To advise the Council in all financial matters. 

(5) To advise all officers of the State in all financial matters pertaining to> 
their respective departments or duties. 


15 


(6) To bring to the notice of the Council all instances of fraud in account 
matters. 

(7) To bring to the notice of the officers concerned any probable excess 
over budget grants. 

(8) To superintend the movement and distribution of coin, so as to keep 
all treasuries properly supplied, and to keep in safe custody all valuable 
securities, e.g ., promissory notes, belonging to the State. 

(9) To furnish, the Revenue authorities with monthly statements of the 
receipts under each head of revenue in the treasuries to enable them to 
check the receipts by the revenue returns. 

47. The Comptroller should always bear in mind that it is not desirable or 
possible to introduce the elaborate procedure of an Indian account office into 
the State. His account and audit rules should be of the very simplest possible 
description, and he should oppose any suggestion or attempt on the part of his 
subordinates to introduce elaboration or technicalities. I have drafted a few 
account and audit rules of a very simple description, which will be found in 
Appendix II. and which might, I think, form the ground plan of the Comptrol¬ 
ler’s work for some time to come. 


48. As regards the Comptroller’s position and powers, he should be 
. . subordinate to the Council alone. He should refuse 

thJcom°troller D<i P ° WerS ° f to accept any order directing him to pay money, except 
in ordinary course or when covered by a budget grant, 
unless issued by the Council. An order for payment issued by an individual 
Member of Council would be accepted provided the order was promptly ratified 
by the Council, otherwise the amount should be held at the personal debit of the 
Member by whom the pay order was issued. The Comptroller should not ques¬ 
tion any order ot' the Council if issued in proper form, unless some account 
principle or rule were violated. If so, he should have the power to make a 
representation to the Council, and if necessary to the Resident. This latter 
power would, it is hoped, be only used in very exceptional cases and in the last 
resort, but it is a power which, 1 think, is absolutely required and without which 
there is a risk that the Comptroller’s position might become untenable. For 
the introduction of an Account and Audit office such as has been sketched would 
put a stop to all irregular payments. No c peremptory ’ orders for payment, 
even if issued by His Highness the Maharaja, could be complied with unless duly 
sanctioned and in proper form. The Comptroller’s position would therefore for 
a time be one of some difficulty. He would require to exercise considerable tact 
and discretion. An occasional deviation from strict rule, provided no important 
principle were involved, would have to be tolerated. But unless the Comptroller 
has ftill powers of reference to the Council and the further power to refer 
important questions to the Resident, it is probable that violations of the most 
elementary account principles would continue in future as in the past. 


49. Lastly, while the new Account Office should keep the accounts of 
Jammu and Kashmir, Ladakh and Gilgit, separately ini 
state accounts to be com- ^oks, w-fc as district accounts are kept separately 
pi e as a w o e. j n dian account offices, the final monthly and 

annual accounts should be compiled accounts of the State as a whole, not 
separate accounts for Jammu and separate accounts for Kashmir. 


Examination of the State's 
accounts. 


50. My examination of the accounts of the State 
has been chiefly confined to the accounts and estimates 
of the Samvat years 1946 (1889-90), 1947 (1890-91), 
and 1948 (1891-92). 


I could have obtained certain figures relating to Samvat 1945, but having 
regard to the results obtained from an examination of the figures for the three 
succeeding years, and the great labour involved, it appeared to be a waste of 
time to go back beyond Samvat 1946. 


16 


The income of Jammu and Kashmir for Samvat 1947 according to the 

State accounts was as follows:— 




Kashmir. 

Jammu. 


Rs. 

Rs. 

Closing balance of Samvat 1946 

14,43,200 

7,80,000 

Ordinary income of Samvat 1947 

17,26,700 

29,75,700 

Extraordinary for income of ditto 

1,43,200 

20,99,300 

Total ... 

33,13,100 

58,55,000 



^ — > 

Total income of the State for Samvat 1947.. 

Rs. 91,68,100 

The expenditure of Jammu and Kashmir in Samvat 1947 

according to the 

State accounts was as follows ;—- 




Kashmir. 

Jammu, 


Rs. 

Rs. 

Ordinary expenditure .., 

13,67,400 

29.84,300 

Arrears 

2,54,200 

3,80,700 

Extraordinary expenditure 

3,12,000 

23,53,200 

Total 

19,33,600 

57,18,200 

% 

Total expenditure of the State for Samvat 1947 ... Rs. 

-- 

76,51,800 

Balance of revenue over expenditure .., 

... Rs. 

15,16,300 

51. Nothing could he more satisfactory than this state of affairs if the 


accounts were correct. But they are absolutely and entirely misleading. A 
considerable portion of the land revenue in Kashmir is paid in kind ; hence of 
the closing balance of Samvat 1946 Rs. 10,71,500 represents the price 'of grain, 
cotton, oil-seeds and the like at State rates. But to quote the Bevenue Member’s 
memorandum which accompanies the accounts, at the close of Samvat 
1946 the Governor of Kashmir had reported the price of grain of the previous 
year in store at about Bs. 10,71,529 at the State rate, bnt the Bevenue Member 
had some reason to doubt that there will not he so much available in the store 
as reported, and the price of certain grains estimated by the Governor at the 
State rates was actually much higher than the bazar rates. When the accounts 
were prepared and the bazar rates ascertained the price of grains amounted to 
Bs. 5,49,995-8-0 only. Now on reviewing the papers relating to closing balance 
of 1947, the doubt was carried to the extent of truth, because the closing 
balance in kind of 1946 did not come out to be correct at the close of 1947. 
The Governor of Kashmir has been asked to report in detail the cause of the 
discrepancies. The matter will be reported in full, when the reply is received. 
On these grounds the Bevenue Member doubts if the grain in store, price of which 
is estimated at the bazar rates, will in the end of 1947 fetch the estimated price 
and that all the grains in store could he disposed of.” - 

52. The extraordinary income consists of withdrawals from the Reserve 
Treasuries of the State, transfers of money between Jammu and Srinagar, adiust- 
ments of advances and a number of items, all of which should have been classi¬ 
fied as ordinary items. Many of the items, such as transfers, are not of course 
income at all. 

53. As regards expenditure, the extraordinary expenditure includes amon<* 
other items transfers of money from Jammu to Srinagar, deposits with the 
Panjab Banking Corporation, Srinagar Branch, payments on account of public 
works and the like. Most of the items are not in any way expenditure and 
almost all the others are susceptible of classification as ordinary expenditure 










17 


Revised state of revenue , , 54 , ^he Revenue Member accordingly revised his 
and expenditure. statement or revenue and expenditure and presented 

it in the following form :— 


Closing balance, Samvat 1946 

( Cash 
\ Grain, &c. 

Rs. 

1,89,131 

5,49,996 

Actual income, Samvat 1947 

... , # 

7,39,127 
. 51,63,579 

Actual expenditure, Samvat 1947 

Total ... 

59,02,706 
. 49,86,589 

Closing balance, Samvat 1947 

f Cash 

1 Grain, &c. 

1,02,832 

8,13,285 


Total .. 

. 9,16,117 


55. The cash (Rs. 1,02,832) in the closing cash balance of Samvat 1947 
Closing cash, balance of re P resents the amount actually in the treasuries and sub- 

Samvat 1947 , treasuries of Jammu and Kashmir at the close of Samvat 

1947, but I have not been able to verify the opening 
cash balance (Rs. 1,89,131). The grain, &c., valued at Rs. 5,49,996 in the opening 
balance represent the value of the grain, &c., originally valued at Rs. 10,71,529. 
The value was thus reduced by about one-half. There is no real proof that the grain, 
&c., shown in the closing balance of Samvat 1947 was really worth Rs. 8,13,285 
on 1st Bysakh, Samvat 1948, or was in store on that date. The Governor of 
Kashmir (the revenue collections in kind in Jammu are practically nil) reported 
the grain to be worth the sum stated, but having regard to the reduction made 
in the value of grain, &c., said to be in store on 1st Bysakh, Samvat 1947, and 
the fact that the Governor does not verify the value personally, there is every 
reason to doubt whether the valuation can be accepted as even approximately 
correct. 

56. Further examination of the detailed accounts for Samvat 1947 brought 

™ ,, - ,,, further facts to light. The cash balance at the end of 

accounts of Samvat 1947. the y ear ( Es - 1,02,832) represents, as has already been 
stated, the actual cash in the treasuries and sub¬ 
treasuries of the State at the close of the year. But it in no way represents the 
real balance belonging to the State. Owing to want of funds, payments of 
cheques at the Srinagar and Jammu treasuries are usually very irregular. 
When a branch of the Panjab Banking Corporation was started at Srinagar 
about 18 months ago, officers, having regard to the very irregular payments at 
the treasury, began to press the Council to grant them large lump su ms , when 
the treasury was in funds, to meet their expenditure for a considerable period. 
These sums when received were placed in current account with the Panjab 
Banking Corporation and drawn upon as an ordinary banking account. As also 
it has not been the custom to insist that savings from budget grants shall lapse to the 
State at the close of the year any such savings were carried over to the succeed¬ 
ing year. Again the State possesses a large sum in Government promissory 
notes, which forms part of the Reserve Treasury money, but the interest on 
which is credited to the State as revenue. These promissory notes are in the 
custody of the Agra Bank, Bombay, and there is usually a balance of interest in 
the bank to the credit of the State on current account. There is also usually 
a considerable sum in the hands of the Military Secretary for payment of 
current expenses. 

57. Any ordinarily well regulated Account Department would have kept 
itself acquainted with the state of these personal accounts, and especially at the 
close of the year would have insisted on obtaining a statement of the credit 
balances, whether these balances were held to lapse to the State or not. But it 
does not appear to have been any person’s business to call for these statements, 
and the Account Department of the Revenue Member’s office professed itself to 
be totally unacquainted with the existence of such balances. 

con 1420—5 






18 


58. I have not been able to obtain an exhaustive account of these balances. 

„ , , , , , The following statement is, however, a far closer 

Real balances at credit at - - ° 


the cbd of Sara va t 1947. 
the accounts of the State : 


approximation to the real balance at the credit of the 
State at the close of Sam vat 1947 than that given in 


Rs. 

Cash in State treasuries ... ... ... ... 1,02,832 

„ Agra Bank, Bombay .... ... ... 62,459 

Panjab Banking Corporation, Srinagar (1) ... ... 50.000 

„ „ ( 2 ) ... ... 18,860 
Settlement Officer .. ... ... 16,681 

Cash in Sialkote Treasury (personal ledger account for Gilgit 

Road) ... ... ... ... ... 1,47,750. 

Balance at credit of the Chief Engineer ... ... 1,72,512 

>> „ „ Military Secretary ... ... 1,25,612 

Cash in the hands of the chief Postal Officer ... ... 27,500 

Total ... 7,24,206 

The fact that such large amounts have not been brought to account and were 
for the most part unknown, to the Account Department is a sufficient indication 
of the faulty nature of the existing arrangements. 

59. The only item regarding which any remark seems necessary is the 

Rs. 50.000 With Panjab ofR?-®°.000 with the Panjab Banking Corpora- 

Banking Company. tlon - This sum was deposited without interest, ap¬ 

parently as an encouragement to the hank to open 
a branch at Srinagar, and the terms of repayment were left so indefinite that the 
hank appears to have looked upon the money as a “ permanent deposit.” As the 
money had remained on deposit for a considerable period and the State is and 
has been in urgent want of ready money for a long time past, an effort has 
recently been made to obtain repayment of the money. As the result, an ami¬ 
cable arrangement has been arrived at by which Rs. 10,000 will be repaid to the 
State every three months, the final payment being made in January 1893. 

60. As the Account Department had no official knowledge of the State 

t p * ^ account with the Agra Bank, Bombay, it followed 

partmentTf \ccomuT kept tha t credit was only taken in the State accounts for 
outside the State treasuries. sums actually withdrawn from the bank on account 
of interest on the Government promissory notes be¬ 
longing to the Reserve Treasuries deposited in the hank. The management of 
the State vineyards, hop gardens and silk cultivation is in the competent hands 
of the Settlement Officer. Mr. Lawrence kept the accounts of the receipts and 
disbursements of these departments in his own office, and the Account Office pre¬ 
pared the final accounts of the year without waiting for his accounts. 

61. The revenue account of the State showed considerable receipts from 

Postal and other receipts. the ? ost Tel ^P h > Excise and Forest Depart- 

ments. On the expenditure side of the accounts. Postal 
and Telegraph expenditure is lumped with a number of other items against the 
General Department, Excise and Eorest expenditure against the Revenue Depart¬ 
ment. No receipts are shown as against Public Works, though a > considerable 
sum is realised from rent of State houses and bungalows and from tolls. Such 
receipts are taken in reduction of the total expenditure of the Public * Works 
circle in which they are realised. 

'62. No credits are afforded to the Post or Telegraph Departments for the 
conveyance of service covers and messages. The value 
of the service labels used in Samvat 1947 is stated to 
have exceeded Rs. 31,000 and of State messages sent 
by telegraph to have amounted to Rs. 1,08,000. No attempt is ever made to 
restrict the use of the telegraph or to compress messages. All Native officials of 
the rank of a native doctor, a sergeant of police or a naib tahsildar are permitted 
to send messages free. Messages are usually sent “ urgent ” in the most flowery 
Urdu. If a fixed yearly sum were allotted to each large office in Kashmir, 


Postal and telegraph service 
messages. 





19 


if telegrams were sent only when absolutely necessary, and if they were properly 
abbreviated and compressed, the value of the messages sent need not probably 
exceed Us. 30,000 a year. In any case, proper accounting would show as a 
receipt the value of service messages and service postage charges, corresponding 
debits being shown on the expenditure side against the various offices in the 
State. 


63. The telegraph lines belong to the State, One line extends from 

Telegraph lines in the State. Srinagar to K ° hala on the Jlielum Valley road, with a 
branch from Baramulla to Gulmarg. Anothef line 
runs from Srinagar to Jammu via the Banihal pass. A third line extends from 
Srinagar by Dras and Kargil past Skardo to a place called Tak, about 100 miles 
from Bunji. Prom Kargil it is intended that the line should be continued to Leh, 
but the line has not as yet been constructed and in any case the wire is inters 
rupted near Sonamarg (about 42 miles from Srinagar). Prom Gilgit there is, I 
believe, a line to Astor or Bunji, so that the completion of the Skardo-Tak- 
Bunji or Skardo-Tak-Astor line would give through communication with Gilgit. 
There was formerly, I am told, a direct line between Astor and Srinagar, but 
apparently it was never in proper working order. 


Through communication with Gilgit is a matter of the utmost importance. 
Mr. Byrne and Mr. Olpherts of the Telegraph Department will shortly report 
to the Government of India on the telegraph lines of the State. In the mean¬ 
time I may remark that as the cost of a direct underground cable on that 
portion of the direct Gilgit road which is practically impassable in winter (a length 
of 80 or 100 miles) is prohibitive, the line must, if possible, be aerial, or, if such a 
line is impracticable, be carried round by Skardo and Bunji, there being, I under¬ 
stand, less snow on that route. There is, I believe, very little doubt that this 
is the more favourable route. 


61. All the lines in the State are in very indifferent order. There is such 
: a press of State messages that private messages are 

greatly delayed Hence private traffic is red/ced to 
ment of India. a minimum. After careful enquiry I have no hesita¬ 

tion in saying that if all the telegraph lines in the 
State were taken over by the Government of India or all the lines except the 
Jammu-Srinagar line, the Government of India could afford to pay liberal 
compensation to the State for the erection of the lines already in existence 
could afford to make a.certain allowance,to the State towards the cost of service 
messages, could maintain the lines in thorough and efficient order and make a 
profit on the working of the telegraph. The European visitors to Kashmir 
alone, who are arriving in larger numbers every year, would supply a large 
amount of traffic, in proof of which it may he mentioned that the cost of work¬ 
ing the Gulmarg extension in 1889-90 was Bs. 135-8-0, while the value of the 
private messages was Its. 751. In addition, service messages to the value of 
Bs. 2,529 were sent over this line. 

65. Postage stamps are printed at the State printing press at Jammu. They 

di A . , are well-known throughout India as being the worst 

k.tate pos age s amps. printed and worst got up postage stamps in the 
country. The paper is of the most flimsy description, the printing is frequently 
a smudge, the stamps are not perforated and they are not gummed. I cannot 
find that any precautions whatever are exercised to prevent the press from print¬ 
ing stamps for private sale or consumption, and the chief Postal Officer, Sirajudin 
Ahmad, an able and intelligent officer, informed me that while the value of 
ordinary postage stamps affixed to covers which passed through the post office 
in Samvat 1947 exceeded Bs. 11,000, the credits on account of sale of postage 
stamps amounted to less than Bs. 6,000. The Council is, I understand, unwilling 
to introduce over printed British India stamps in the State, such as are found 
in Patiala for example, but there can be no possible objection to the postage 
and telegraph stamps required by the State being obtained, with such device as 
may commend itself to the Council, from a good English firm, e. g., Messrs. De 
la Bue and Co. I am perfectly certain that a considerable increase in revenue 
would result from an arrangement of the kind. There are separate State and 


20 


British post offices at Srinagar, Baramulla, Uri and Domel. If some arrange¬ 
ment could be made for amalgamating these offices, a saving to the State and 
to the Government of India might be effected. 

66. The classification of receipts and expenditure is very faulty. On the 
receipt side there are, for example, two major heads. 
Classification of receipts « stamps, court fees and postage ” and “ postal and 
an expen 1 ure. telegraph receipts.’’ I am informed, though it is 

hardly credible, that the latter head is intended for cash receipts only and the 
former for all stamp receipts, whether these receipts are from sale of postage, 
judicial, general or telegraph stamps. The supply of judicial stamps is very 
badly regulated. In many places none are to be had for sale. I have been 
informed by Lai Jeikishen Dass, the Residency Vakil, that on his recent tour of 
inspection in Tahsil Anantnag, the President of the Council, Raja Amar Singh, 
admitted nearly 2,000 petitions unstamped, though a stamp of 8 annas was 
leviable on each, because no judicial stamps were available for sale. No expla¬ 
nation of the defective supply, nor of the reason why the fee was not realised in 
cash, was forthcoming. 


67. As regards the expenditure side of the accounts, the inclusion of a 
number of distinct heads against one department, such as the Revenue or 
General Department, is inconvenient. It is still more inconvenient to show the 
expenditure of, for example, the Public Works Department, one of the great 
spending departments of the State, partly under the Judicial Department and 
partly as Extraordinary Expenditure. I have drawn up a simple scheme for the 
classification of the State accounts which will be found in Appendix III. Such 
additions as may be considered necessary may be made to the heads given by me, 
but the classification has been tested with the detailed accounts and has been 
found to classify every item. The classification is so simple that it can be under¬ 
stood without any difficulty, and if it were introduced in the State Account 
Office, it would, I think, prove of considerable value. 


68. An important and intricate question that presented itself in connection 
, , ., , , with the State accounts as originally presented to me 

tie sS? 7 is that of the "rears and debts due V the State. No 

portion of my enquiry has proved more difficult, and 
the results of a prolonged investigation can only be considered to be approxi¬ 
mately correct, 


These arrears represent debts due by the State to individuals or depart¬ 
ments. In many cases they consist of arrears of pay, in others of claims on 
account of articles supplied to the Slate. It is quite impossible to fix the date 
at which pay and claims for supplies began to fall into arrears. In the time of 
the late Maharaja Ranbir Singh the pay of officials was usually only disbursed 
every six months, but there appears to have been fair regularity in making such 
payments, and it seems probable that there were no serious arrears until Maha¬ 
raja Pertab Singh became ruler of the State. 


69. At the present time there are arrear claims of Samvat 1945 and of 
. earlier years to the amount of Rs. 1,84,845, which are 
admittedly due, and every year has added largely to 
the amount. There are large establishments which only obtain pay occasionally 
once in six months perhaps if they are fortunate, but quite possibly not for 12 
or 18 months after the pay is due, The effect on the administration is disastrous. 
The officials must live somehow, and as they cannot foretell when they are likely 
to be paid they must resort to embezzlement, peculation and fraud to keep 
themselves alive. Roughly speaking it may be said that the only persons in the 
State who get paid with ordinary regularity are the Maharaja and his followers 
the Members of Council, the Governors, the English officials, and the few offi¬ 
cials who can make interest with the Governors (who are practically in charge 
of the treasuries) to get their bills cashed, 


70. Quite apart from the evil effects of this system qf arrears, which has 
become so much a matter of course as to be very little regarded, on the officials 
it is obvious that in the long run the State must suffer greatly by the delay in 
payment of its debts. ^ 


21 


Efficient audit, even if the Account Office were in proper order, is impossible 
when claims, perhaps two or three years old, are presented for payment. It may 
be possible to ascertain that certain work, for example, had really been per¬ 
formed for the State or certain services rendered, but whether the value of the 
work or service was Rs. 100 or Rs. 1,000 cannot be at all so easily ascertained. 
Hence fictitious and collusive claims and claims for excessive amounts must be 
common, and with such, the miserably inefficient Audit Office at present in 
existence is totally unable to cope. In all probability strict scrutiny would reduce 
considerably the amounts claimed from the State, but at present there is no 
agency by which the claims can be properly examined. 


71. In the State accounts the arrears and debts due by the State at the com- 
i<U 7 men cement of Samvat 1947 were estimated to amount 

Arrears m Samvat 194, ^ Rs 10)1§j8g6 . Buring the y0ar 6>84>907 were 

disbursed on account of arrears. But in order to do so payments which should 
have been made in Samvat 1947 were allowed to fall into arrear, and hence the 
arrears amounted to Rs. 13,64,699 by the end of the year. 


Method of dealing 1 with the 
arrears iti the accounts. 


72. The method of dealing with this amount is 
so truly characteristic of the State finance that it may 
he stated in detail. 


It has been shown (paragraph 54) that the year Samvat 1947 was held to 
have closed with a credit balance of Rs. 9,16,117, the larger portion of this 
amount being the estimated value of grain, cotton, &c., in store at the close of 
the year. This sum, Rs. 9,16,117, has been credited in the State accounts against 
the arrear balance, Rs. 13,64,699, leaving arrears payable after deducting the 
amount of closing balance amounting to Rs. 4,4S,581. This sum is disposed of 
with the remark, “ This amount has been included in the ordinary expenditure 
of the Budget Estimates of Samvat 1948.” It may be incidentally remarked 
that unless the amount appears in the estimates of Samvat 1948 against the 
heading “ unpaid arrears ” it cannot be traced. 

Now it is not pretended that either the cash or the grain, cotton, &c., which 
represented the closing balance, Rs. 9,16,117, of Samvat 1947 were applied in 
payment of the arrears, Rs. 13,64,699, due at the end of the year, and in fact 
nothing of the sort was done. The whole transaction is fictitious, and further, 
the amount shown as due by the State at the end of the year is incorrect. 


Reduction in amount of 
amars at first exhibited. 


73. Careful examination carried out at my instance in the Revenue Mem¬ 
ber’s office resulted in a reduction of the sum shown as 
arrears at the end of Samvat 1947 from Rs. 13,64,699 
tolls. 11,95,879. But it has been ascertained that there 

was in addition a debt due at the end of the year to Messrs. Spedding and Co. 
for the completion of the Jhelum Valley road amounting to Rs. 2,57,815, 
and further that the amount of arrears due to the Military Department at the 
end of the year (Rs. 3,23,842) had been omitted. 

These two items are undoubtedly due, and including them the State debt 
at the end of Samvat 1947 amounted to Rs. 17,77,536. It is possible that a 
portion of this amount will never be claimed owing to the death of the 
claimants, or can be met by set-offs. On the other hand, fresh claims may be 
presented which may prove to be indisputable. It is obvious that most careful 
scrutiny of every claim is necessary. In my opinion the Council should issue a 
proclamation to the effect that all bills for arrears of pay, claims on or debts 
.due by the State must be presented for payment within (say) six months, after 
which period no such claims will be admitted. It is not improbable that the 
issue of some such notice and a most careful scrutiny of the accounts presented 
for payment would reduce the State’s liabilities to 15 lakhs. 

74. The most obvious method of arriving at a proper estimate of the State 

debts was to ascertain from the Account Office the 
Audited arrear claims. amount due on bills passed for payment but remain¬ 
ing unpaid. It has, however, to be remembered that the Military and Public 
Works Departments audit their own expenditure, and that many claims have not 
vet been sent to the Account Department, as it is well known that they will 
simply remain unpaid in the Account Office, It does not also in the least 
con 1420—0 


22 


follow that the amount clue as certified, by the Account Office is really correct. 
In all probability it is not strictly correct. The results, however, of an enquiry 
in this direction are as follows :— 

Rs. 

Amount of pay orders issued by the Daftar Diwaui which 


remain uncashed ... ... .. ... 6,52,969 

Messrs. Spedding & Co.’s bill ... ... ... 2,57,815 

Military arrears ... ... ... ... 3,23,842 

Public Works arrears (estimate) ... ... ... 1,87,905 


Total ... 14,22,531 


This amount practically represents audited expenditure. 

75. In addition, however, to the debts due in the Civil Department, an 

examination of the great charitable fund called the 
marth Fund 6 to * e ar " Dharmarth Fund has shown that the State is indebted 

to it in the sum of Rs. 1,72,000. The correctness of 
this sum has been admitted by the Council. Hence the maximum debt due by 
the State, so far as can be gathered from the accounts, is Rs. 19,49,536 
(17,77,536+ 1,72,000) and the minimum Rs. 15,94,531 (14,22,531 +1,72,000). 

76. In the following statement is shown the revenue and expenditure of 

, , the State for Samvat 1947 (1890-91) according to the 

expendUuTefOT SamTaTl947 original estimates, the corrected State accounts as 

finally furnished to me, and these corrected accounts 
as revised by me. I cannot feel absolutely certain that the revised accounts are 
correct, but they are the result of a long investigation, and I believe them to be 
fairly accurate, with the exception of certain errors in classification and the 
omission of certain book credits and debits to which allusion has already been 
made. 




Revenue, Samvat 1947 (a.d. 1890*91). I Expenditure, Samvat 1947 (a.d. 1890-91). 


23 


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24 


77. As regards Revenue, the actuals show that the Land Revenue collec¬ 
tions were about a lakh below the estimate. The 
Revenue of Samvat 1947. estimate was about 1} lakh below the actuals of Sam- 
vat 1946. The Customs and Octroi receipts were about Rs. 1,20,000 below the 
estimate and about half a^akh below the actuals of Samvat 1946. The actuals 
under Grazing Rees were practically nil as against an estimate of Rs. 80,000 and 
against actuals of Rs. 28,000 in Samvat 1946. The receipts from Excise slightly 
exceeded the estimate, but the actuals of the previous year were higher. The 
receipts on account of Rent of State property in British India were less than half 
the estimate and Rs. 9,000 below the receipts of the previous year. 

The receipts from Contracts of State monopolies were over a lakh of rupees 
below the estimate and upwards of Rs. 40,000 below the actuals of the previous 
year. The interest on Government promissory notes was incorrectly estimated 
and the actuals according to the State accounts were also incorrect. The receipts 
under * Miscellaneous ’ were upwards of 2 lakhs of rupees below the estimate, 
but about Rs, 90,000 in excess of the receipts of Samvat 1946. The receipts 
from Realisation of Arrears were about Rs, 66,000 in excess of the estimate. 
Nothing appears against this head in the accounts of Samvat 1946. 


78. As regards Expenditure, the revised accounts show a smaller expendi- 

. ture than the estimates under all heads except Public 

1947 Xpendltare Pf Saravat Works, but the reduction is not due to savings, but 
to non-payment of claims, which have consequently 
become arrears due by the State, 

79. The Land Revenue of Jammu is realised almost entirely in cash, The 

T , T last settlement was a summary settlement made in 

an revenue o ammu. Samvat 1928. Since then large tracts of uncultivated 
land have been brought under cultivation, and the officials best qualified to judge 
believe that a new settlement would add from 3 to 5 lakhs of rupees a year to 
the revenue, The increase will, it is believed, be very considerable in the Tahsils 
in the plains, such as Manawar and Shahr Khas, but will of course be less in 
the hilly portion. The estimated revenue of the current year is Rs. 22,52,518. 
The estimated revenue of Samvat 1947 was Rs, 22,68,129, but the collections 
amounted to Rs, 21,39,235 only. This result is very unsatisfactory. A consi¬ 
derable portion of the arrears was due to the deputation of one of the Tahsildars 
on census duty and the ** want of appointment of any responsible Tahsildar for 
a long time.” Other short collections were due to embezzlement by a Tahsildar. 

This portion of the State is, comparatively speaking, so prosperous that 
short collections of land revenue can only be attributed to defective revenue 
administration- The Revenue Member has stated that the Governor does 
not carry out his orders. If so the remedy is clear. A reference to the Council, 
or if necessary to the Resident, would very quickly put matters to rights. 

No definite proposals have yet been made for a re-settlement of Jammu, 
but I believe that Mr. Lawrence has got the matter under consideration. 


80. In Kashmir the Land Revenue has always been realised partly in cash 
and partly in kind. For several years past a settle¬ 
ment has been in progress. It was first undertaken 
by Mr. A. Wingate of the Bo. C,S., who did a large 
amount of measurement work, It is now conducted by Mr. W. R Lawrence 
C.I.E., C.S. 


Settlement in progress in 
Kashmir. 


81. Mr. Lawrence has assessed a number of Tahsils and his assessments of 
4 or 5 Tahsils have been approved by the Council. The settlement will pro¬ 
bably be finished in less than two years. I understand that the settlement on 
which Mr. Lawrence is engaged is not likely to add materially to the nominal 
land revenue of Kashmir. An increase of a lakh of rupees is as much as can 
be expected. But the actual cash collections will after settlement be consider¬ 
ably higher than they have hitherto been, arrears will be less likely to accrue, 
and as a larger portion of the land revenue will be paid in cash and a smaller 
portion in kind, the opportunities which now exist for embezzling that portion 
pf the land revenue which is realised in kind Trill be diminished, ° 


25 


82. The realisation of a portion of the land revenue in kind, the method of 

t, , collection and of disposal of the revenue so realised is 

Realisation ot land revenue - x -------- 


in kind in Kashmir. 


Revenue in assessed Tahsils. 


the most remarkable feature in the Kashmir land 
revenue system and merits detailed examination. 

It has already been stated (paragraph 19) that the chief food of the people 
is rice, and it is in rice, or £ shali ’ as unhusked rice is called, that the principal 
payments of land revenue in kind are made, so much so that ‘ shali ’ may be 
taken as meaning “ land revenue collections in kind.” The other articles which 
may be tendered by the cultivators in payment of revenue in kind are barley, 
wheat, Indian corn, moong (pulse), Ulsi ^linseed) rape-seed, sesamum and several 
minor articles, in all 19. 

83. In the assessed Tahsils the amount of revenue to be realised in each 
year has been fixed, both as regards cash and kind, 
but the cultivators have the option of paying their 

land revenue in cash instead of in kind, and Mr. Lawrence remarks: “ The 
effect of my assessments in Kashmir will be that a large proportion of the 
revenue will be paid in cash, and it is probable that before the ten years expire 
nearly the whole of the revenue will be paid in cash. I may notice the fact 
that in the Lai Tahsil when the assessments were announced the people elected 
to pay about Rs. 32,000 in kind. Since the assessment was announced more than 
half of this amount has been paid in cash. In Phak Tahsil almost the whole of 
the new revenue is paid in cash, and in Daunsic and Ich-Nagam Tahsils the 
same process is going on as in the Lai Tahsil, viz., people are paying cash in 
lieu of the kind for which they elected at the time of the announcing the new 
assessments. As one goes further from the city it is possible that for some years 
the people will have to pay a certain amount of the revenue in kind, but I am 
sure that when the assessments are announced the amount hitherto paid in cash 
will be nearly doubled.” 

Purther, in the assessed Tahsils revenue in kind may only be paid in rice, 
Indian corn, barley or wheat. 

84. While in the assessed Tahsils the land revenue is fixed, it is in the un- 
assessed Tahsils subject to alteration year by year. The 
method of assessment is as follows. The Tahsildar 
first visits each village in his Tahsil and reports to his 

Wazir on the state of the crops and the amount of revenue which he considers 
should be levied in that year. The Wazir also makes an examination of the 
villages in his Wazarat and sends his report with that of the Tahsildar to the 
Governor, who may either adopt the opinions of the Wazirs and Tahsildars, or after 
visiting the villages make his own report. The final power of sanction in 
respect to the revenue to be levied rests with the Revenue Member. It is obvious 
that the examination made by each and all of these officials must be very superfi¬ 
cial and that it must frequently be quite impossible to judge at the time of exami¬ 
nation whether the crops are likely to be good, indifferent or bad. The assess¬ 
ment in cash or in kind having been fixed, the cultivators have the option of pay¬ 
ing in kind the amount fixed or of paying the whole or a portion of the revenue 
assessed in kind, in cash at fixed commutation rates. 

The rates of course vary for the different kinds of produce, but the more 
important are 

State rates for commutation in cash. 


Revenue in the unassessed 
Tahsils. 


1. Rice or Indian corn 

Rs. a. p. 

... 14 0 per Kharwar of 15 traks. 

2. Wheat 

3 3 5 

\9 

3. Barley 

14 9 

99 

4. Cotton 

8 12 0 „ 

9) 

5. Moong (pulse) 

5 3 0 

99 

The Kharwar of 15 traks equals about two Imperial maunds. 
The latest bazar rates that I have been able to obtain are :— 

Rs. a. p. 

1. Rice or Indian corn ... 1 4 0 per Kharwar. 

i 

2. Wheat 

... 3 2 6 „ 


3. Barley 

4. Cotton 

... 0 15 0 „ 

5 8 0 „ 

• 1 

5. Moong (pulse) 

... 3 4 0 „ 


con 1420—7 




f 








26 


It is obvious that it would pay cultivators to buy cotton, moong (pulse) 
and barley in the bazar and pay it to the State as revenue in kind, and this is 
actually done in some cases. Instances have been known where a village which 
did not grow any cotton whatever had paid a large portion of its revenue in kind 
to the State in cotton. 


85. The chief portion of the revenue in kind is, however, paid in unhusked 
rice, and the usual plan is to bring the unhusked rice 
n us e nee or < s a 1 . g r j na g arj w here it is sold at the fixed rate of Rs. 1-4* 

a Kharwar (2 maunds Imperial) to the inhabitants. At page 22 of his preliminary 
report on the Kashmir settlement Mr. Wingate remarked, “ The Kashmir culti¬ 
vator is a machine to produce * shali ’ for a very large and mostly idle city 
population.” The reason that ‘ shali ’ is so cheap is because if the price “weie 
allowed to rise to its proper level the whole body of Pandits (the bulk of the 
population of Srinagar) would compel the Palace to yield to their demands.” 


86. The method of collecting and despatching the ‘ shali* to Srinagar 
is a remarkable one and very characteristic. The 
‘ shaH.’ 10 0 C0 ectl0n ° Governor appoints one or two men, called Tehvildars* 
in each Tahsil, who are responsible for despatching to 
Srinagar the grain collected in the Tahsil as State revenue. As already stated* 
the amount of grain varies from year to year at the discretion of the Governor. 
The Lambardar, or village headman responsible for the collection of land 
revenue, delivers the grain to the Tehvildar and obtains the Tehvildar’s receipt, 
which he takes to the Tahsildar, by whom the receipt is exchanged for another 
showing the payment estimated in money which has been made. The State grain 
is stored in the villages, covered with a rude grass thatch and sealed in a primi¬ 
tive manner to prevent robbery. At a convenient time the Tehvildar’s agents 
visit the village, and a man selected by the village weighs out the State share. 
The profession of weighing is a special one, and in Kashmir the members of the 
profession are said to be so dexterous that in weighingout a Kharwar (2 maunds) 
they can add 2 traks (say 11^ seers) without being detected. When the 
Tehvildar’s agent has weighed out the State’s share, his next duty is to convey 
the grain to the nearest Ghat on the river. Thence it proceeds in boats to the 
city, where it is either sold off the boats or stored in granaries. 


87. The cost of carriage to the Ghat and from the Ghat to the city is 
deducted from the value of the total amount of grain for which the Tehvildar is 
responsible. The estimated cost of the carriage of grain to the city during the 
current year is Rs. 55,000, and the total cost of the department for “ the collection 
of grain and other State produce ” Rs. 61,912. This amount includes the pay of 
the officer who looks after the State granaries, the storekeepers, weighmen and 
the like. 


88. In former days the Tehvildars were either paid proper salaries or the 
, ... . , duties of the. Tehvildars were discharged by the 

J iahsildar. At present the Tehvildar receives no pay 
beyond an allowance in grain of about 1| seer per Kharwar accounted for by him 
and a small allowance for wastage. The Tehvildar has, on the contrary, to pay 
large douceurs to obtain his lucrative post. It follows that the Tehvildar must 
recoup himself in some way. As a rule, in lieu of the 15 traks (2 maunds) due by 
the village he takes 17, sometimes 18 traks of ‘ shali,’ and it is practically in his 
option to take good ‘ shali,’ or on receiving a present from the village to take bad 
* shali.’ Then he can sell the State ‘ shali ’ to the village at Rs. 1-4-0 for 15 traks 
(2 maunds), the price fixed in the city. He thus is able to pocket the cost of 
carriage by land and by water. Sometimes the Tehvildar does not rest con¬ 
tented with a perquisite of 2 traks and takes 3 traks. When the ‘ shali ’ is placed 
on the boats, the boatmen at once commence to mix the grain with water and 
earth in order to increase the weight, and by the time the boat reaches Srinagar 
the ‘ shali ’ is usually in very bad order. Some that I inspected in one of the 
granaries was old, musty and certainly mixed with 25 per cent, of earth. 


89.. On arrival at Srinagar the ‘shali’ passes into the hands of the 
officers in charge of the granaries, by whom it is sold to all applicants at the 
fixed rate of Rs. 1-4-0 for 15 traks (2 maunds). It is stated that the dexterous 


27 


weighman will only weigh out 13 instead of 15 traks, but this is probably an 
exaggeration and the shortage is not probably more than half a trak on each 15 
traks. The total result of the present system is, therefore, that the cultivator has 
to pay 2 traks for every 15 traks to the Tehvildar, that the boatmen steal the 
grain, making up short weight by water and earth, and that the city people, 
instead of getting 15 traks for Rs. 1-4-0, get only 14| traks of grain, which is 
dirty, inferior and often rotten and stinking. Once in the granaries—places, so 
far as I have seen, open to wind and rain and the chosen home of rats, mice 
and insects of all sorts—the grain is liable to decompose or rot, or it may be 
privately disposed of and the Council then informed that it has become rotten 
and has been thrown into the river. Or it is quite possible that the Tehvildar 
may not send the grain to the city ; all that has to be done being to arrange 
with some official to show that it had been sent. No comparison of the despatches 
with the receipts is apparently made, and it is only surprising that any ‘ shali * 
is permitted to reach the city at all. 

90. From the beginning to the end the system is one series of frauds, and 

a , , ,i ,. one of the chief reasons is that the Tehvildars are men 

I he system of collecting p , , , . . , „ . , 

‘ shali * a series of frauds. ot naught, who receive no pay and have no official 
position, and who have to recoup themselves for the 
bribes they are obliged to pay to officials for obtaining the annual grain contract. 
It is well-known to the Council that the Tehvildars are mostly unworthy of the 
trust reposed in them, but they are never punished. All that is done is to show 
an amount of grain short delivered by them as arrears. The amount shown as 
arrears against these men is enormous, but no steps are apparently ever taken 
to recover any portion of the arrears, and the greater portion is totally irre¬ 
coverable and should be written off the books of the State. 

91. The chief loser is the State and the next loser is the cultivator. The 
city alone benefits, and in a manner which is about as bad as could possibly be 
conceived. The poorer classes, for whose ostensible benefit the ‘shali’ is 
brought to the city, are formed by the remnants of the shawl industry and by 
villagers who emigrated to the city in hard times and who have become 
wedded to a city life. These men do not seek work outside the city, and all 
work in connection with European visitors to the interior of the country has to 
be done by village * begar ’ (free labour). With * shali ’ at annas 10 a maund, the 
poorer classes of the city population need not and will not exert themselves, and 
until prices rise the ex-villagers will not return to cultivation and the others 
will not condescend to carry loads. 

92. A steady reduction in the amount of‘shali’ paid by the cultivators 

. is an absolute certainty, and the effects on the poorer 

< shali ,U i C nevitable. Paymentj m classes of the city population require careful consi¬ 
deration. It has been suggested that it would be 
advisable to stop the State import of ‘ shali ’ after giving, for example, a year’s 
clear notice, but quite apart from any risk of disturbance or serious suffering, 
there is one very serious obstacle to any sudden cessation of the State import. 
The obstacle is that there are, it may be said, no traders to step into the place of 
the State as importers of ‘ shali,’ owing to the fact that the State has mono¬ 
polised all trades and is in reality the sole trader in the State. It will most 
probably be better to let the import of ‘ shali ’ by the State decline gradually. 
As the assessments are announced the State will bring less and less grain to the 
city and traders will come into existence. 

93. I think a careful enquiry should be made in regard to the recoverable 

and irrecoverable balances of land revenue. These 
Arrears of land revenue. balances are of the most extraordinary nature. In the 
Phak Tahsil, for example, the arrears due at the time of assessment amounted to 
Rs. 35,662 up to the end of Samvat 1936, that is, 12 years ago. Erom Samvat 
1937 to Samvat 1944 additional arrears had accrued amounting to Rs. 60,901, 
the total annual assessed revenue of the Tahsil being about Rs. 71,000. In the 
T A 1 Tahsil the cash arrears in 1889 amounted to Rs. 1,04,123, the annual assess¬ 
ment being about Rs. 97,000. Mr. Wingate reported in 1888 that most of these 
balances were “ purely paper entries used as a means to overawe the villagers or 
to darken the accounts, or from want of system in the accounts.” The most 


28 


prosperous villages were the heaviest in debt to the State. Various causes con¬ 
tributed to the arrears—such as the severe famine of Samvat 1934-36, the lower¬ 
ing of the commutation rates of rice and maize which originally stood at Rs. 2 a 
Kharwar, and the system of auctioning villages to farmers and, on their failure 
to pay, the plan of the holding the villages responsible for the farmers’ bids, or 
collusion between the village and Tahsil officials. Thus if a village had to pay 
Rs. 800, an arrangement could be made by which it only paid Rs. 750 and was 
credited with Rs. 700, Rs. 50 going to the Tahsil authorities and Rs. 100 
to the arrear account. This arrangement is a very common one. 

94. The amount of land revenue in arrears at the end of Samvat 1947 is 
stated to be nearly 48 lakhs of rupees, equal to 3 years’ land revenue of Kashmir. 
In reality, however, the arrears are either paper arrears or mostly irrecoverable, 
and it would be far more satisfactory to wipe off all items except those which 
represent advances of seed grain, or the like, made by the State. It is very doubt¬ 
ful, if this were done, whether 3 lakhs of rupees would remain due. 


The land revenue 
nistration in general. 


admi- 


95. As regards the land revenue administration in general, I am of 
opinion that the Wazirs should send to the Council 
through the Governors, early in each year, statements 
showing the revenue demand in cash and kind (the 
latter information can be filled up by the Governors) from each village. The 
Wazirs should in addition send monthly statements of receipts from and balances 
due by each village. The Account Department would send to the Council cor¬ 
responding statements of receipts by the treasuries, which should agree with the 
Wazirs’statements. The Revenue Member should take vigorous measures for 
recovery of arrears and should know exactly where the arrears are, prospects 
of recovery, the reason for default, and whether there is any attempt at fraud. 


96. The sale of villages on contract should be entirely stopped. The 
Lumbardars should be more strictly bound down to 
to be stopped^ 3 ° n contract their responsibilities for the collection of land revenue, 
whether in cash or in kind. The system of collecting 
‘ shali ’ by means of Tehvildars should be stopped. The Tahsildars should 
collect the revenue in kind as well as the revenue in cash. So much of the 
revenue in kind as can be sold on the spot should be thus disposed of; for the 
rest the Talxsildar should be responsible for securing carriage to Srinagar at the 
lowest possible rates. 


97. The Tahsildars should be responsible for delivery of the grain or other 
produce sent to Srinagar in a clean and dry condition, 
sponsible former, of tw and .should be held responsible for any wetting of the 
revenue in kind. gram, otherwise than by accident on the road. A 

simple pass book should be introduced, for example, in 
triplicate, showing the quantity and kind of produce sent. One piece should 
remain with the Tahsildar as an office copy, one piece should be delivered 
to the receiving officer, and one piece should be returned to the Tahsildar signed 
as a receipt. 


As the ‘ shali ’ receipts in Srinagar will probably diminish year by year 
the staff employed in looking after the granaries should be reduced in proportion. 
No old ‘ shali ’ should be stored after the arrival of the new supply. Old, musty 
and dirty ‘ shali ’ should be disposed of for whatever it will fetch when the new 
crop begins to arrive. 


98. As regards cotton, moong, oil-seeds and the like received as revenue in 

Sale Of produce realised ^ Sta ‘ e must follow the market and be guided 
ns revenue in kind. xt - The P ri ce of cotton and oil-seeds varies from day 

to day in Bombay and Calcutta. It is quite easy for 
the State to ascertain the ruling prices at Bombay, Calcutta, Delhi and Rawal¬ 
pindi. . The produce might be kept a reasonable time, a month or two, if prices 
are rising, but should be sold before there is any chance of deterioration. Mer¬ 
chants should be encouraged to come forward. There should not be any fixed 
sale price. Merchants should have a reasonable chance of making a good profit. 
If they get rich, so much the better. A State can never be rich itself if all its 
people are at one dead level of poverty. If the State cannot trust its own 


29 


people, there are numerous outsiders who would help. The firm of Ralli 
Brothers is known throughout India. It could buy up the whole produce of the 
State with perfect ease and give a fair price. If a Native is preferred, Rai 
Bahadur Sett Bam Ratan, tlie great Mian Mir banker, wuuld do the State’s 
business. As the granaries at Srinagar will be used for some time to come they 
should be put into decent repair so as to keep out rain and rats. They should be 
periodically inspected by independent officers, either the Governor or an officer 
appointed by him. 


99. Lastly, and perhaps most important of all, it is absolutely necessary 
. that the Revenue Member should spend a portion of 

tour 8 eC by S the Revenue’ 1 Mem! season on tour both in Kashmir and Jammu, 

ber. I he area to be toured over is not extensive, for it will 

seldom be necessary to visit the more remote and 
poorer villages. The Revenue Member is certainly not overworked, and one 
tour will do far more towards a prompt realisation of the land revenue and the 
cancellation of absurd arrears than a hundred circulars. 


The land revenue administration never will be satisfactory until the 
Revenue Member devotes two or three months of each year to a tour in Jammu 
and Kashmir. 


100. As regards the proportion in which the revenue is paid in cash and 
. . in kind, the statements furnished to me do not convey 

revenT^paidinkind te very accurate information. But, roughly speaking, the 

value of the revenue received in kind in Kashmir is 
estimated at from 8 to 8-| lakhs of rupees a year. 


101. Any notice of the land revenue system of Kashmir ivould be incom¬ 

plete without a few remarks on the well-known 

The ‘begar system. < begar ’ or forced labour system, which flourishes in 

the State. 

The ‘ begar ’ system is one of the curses of the country ; but it is not the 
system itself that is so much at fault as the method by which it is worked. The 
country is sparsely populated and there is no labouring population apart from 
the cultivators. From time immemorial the Government has had the right to 
call upon the cultivators to render a certain indefinite number of days’ work for 
State purposes, free of charge, and it must, I think, be admitted that if some such 
right of impressing labour did not exist it would frequently be perfectly impos¬ 
sible to carry on the business of the State. Gradually, however, many abuses 
have crept in. The Musalman cultivators, for example, are alone subject to 
* begar,’ the Hindus are exempt. Jaghir and Dharmartli villages (see paragraph 
225) and tenants of Chakdars (e. g., persons who have obtained a grant of waste 
land) have been exempted from forced labour. The cultivators of some villages 
are able to purchase exemption from ‘ begar’ by bribing the Tahsil authorities, 
and in the selection of ‘ begaris ’ the most serious abuses are permitted to exist. 
Men are summoned as ‘ begaris ’ a week or ten days before they are required, and 
to be certain of having an adequate number present, 15 men will be summoned 
where 10 only are required. Little or no regard is paid to the state of the crops 
or of the harvest or, partly owing to ignorance on the part of the Tahsil officials, 
to the villages from which ‘ begaris ’ can most conveniently be drawn. 

102. It seems to me that all cultivators other than Brahmans should be 

held liable to ‘ begar ’ whether they be cultivators 
Proposals regarding ‘begar. Q £ i an j or 0 f Jaghir or Dharmartli villages, 

and that the inhabitants of Srinagar should also take their fair share of the 
work. A register should be prepared for each village, showing the number of 
men liable to ‘ begar,’ their names, the number of carriage animals in each 
village and their owners, and at the foot it might be stated by the Settlement 
Department how many men and how many ponies can be supplied in each 
quarter of the year without serious convenience to agricultural operations. 

In fact what is required is that the burden should be fairly borne by all 
the people in the State, Brahmans excepted, and that it should be so apportioned 
as not to cause any serious loss to the people in their agricultural operations. 
The crops raised are so varied and the climate is so different in different parts 

con 1420 —-8 


30 


of the valley that careful adjustment would enable the people to supply a fair 
amount of forced labour, which nevertheless need not interfere to any appreci¬ 
able extent with their ploughing, sowing, weeding and harvesting. 


103. Customs duty is levied on goods imported into the State. The chief 
p , receipts are at Jammu, at the terminus of the railway, 

us oms u y. a t Kohala on the frontier, on the Jlielum Valley road, 

and at Muzaffarabad on the borders of Hazara. The duty is levied on a 
large number of articles, such as tea, salt, snuff, piece-goods, sugar, hardware, 
tobacco and the like. No export duties are apparently levied. The duty is in 
most instances fairly moderate. 


104. Octroi is levied on produce brought into the towns of Jammu and 
0ctrQ . Srinagar, but articles which have paid customs duty 

are exempt from payment of octroi. 


105. The contracts have always been auctioned together, though there does 
0 , „ v . ,, not seem to he any sound reason why they should not 

fey stem of realising the - --- - ^ -- 


customs duty. 


be separated. The estimate for Samvat 1947 was 
Rs. 3,29,000, the actuals Rs. 2,10,000 only—a loss of 
Us. 1,19,000. The contractor, one Ganesha Mai, became a defaulter, and as no 
adequate security had been taken from him a heavy loss was the result. 


It is characteristic of the State finance that any such contract should have 
been given to this Ganesha Mai without the most complete security. The Forest 
Department has a claim for 7| lakhs of rupees against this man which has 
remained unsettled for a long period, and he appears to be one of the numerous 
body of men in the State who live by taking contracts and purchasing State 
produce, for which they partly pay in cash, partly in services rendered, and part¬ 
ly not at all. That Ganeslia Mai is a partner with the contractor for the 
current year, Sardar Hari Singh, is only what might have been expected. 


106. The present contractor, however, Sardar Hari Singh, is a man of means 
and he is very anxious to carry out his contract honestly. He, however, appears 
to consider that in some matters the Council or the Governors have not treated 
him properly, and it is quite possible that disputes may arise. A remarkable 
example of the mode in which this contract has been worked was stated to me 
by General De Bourbel, the Chief Engineer of the State. Last year he was 
surprised to find that large quantities of salt were being imported into Jammu 
in the three last months of the official year. Enquiry showed that the contractor, 
Ganesha Mai, finding that his contract was not paying, had suddenly lowered 
the customs duty on salt by one-half. The result was a large import, a 
considerable profit to the contractor and a serious loss to the State. The con¬ 
tractor had no right to lower the duty, and though his action in doing so w r as 
known to the Governor, nothing was done to stop him. The Governor of Jammu 
has, since the above was written, informed me that, in his opinion, the contractor 
had a right to raise or lower the duty at his own discretion. If so, the sooner 
such discretion is withdrawn the better will it be for the interests of the State. 


107. It seems to me that it would be better to separate the contracts and 

Proposed future arrange- t( J f, llow the . lo , cal Municipalities to arrange for the levy 
ments. n pt the octroi duty, which, as in many Municipalities 

. . in India, might become the most important item of 

municipal revenue. 

Ilie customs contractor should also make his own arrangements for collect¬ 
ing the duty and should not, as at present, be assisted in doing so by a large 
number of State police or sepoys. 

108. Grazing fees are realised entirely in Jammu. According to the usual 

Grazing fees. practice, by which State officials have as little to do as 

possible with the collection of revenue, this item of 
revenue has hitherto been let out on contract. The result last year was that out 
o an estimate of Rs. 80,500 only Rs. 917 were realised. The contractors 
ecame defaulters, no security had apparently been taken from them, and all 
la can be said in explanation or excuse is that arrangements have been made 
for realization. 


31 


Excise. 


The fees should never he given out on contract, but should be realized 
direct by the Talisil officials. Sheep and cattle are driven during the summer 
months to higher pasture-grounds, and in doing so they follow certain well- 
known and defined routes. The present practice is for the contractor to levy a 
toll according to the number of animals which cross certain bridges. The 
system is a perfectly simple one. It can easily be carried out by the Tahsildars, 
and by doing so a large increase over even the nominal contract price is 
probable. 

109. I would add that though the explanation of the large decrease in 
receipts given officially is that the contractors become defaulters, I have also 
heard it stated that they paid the greater portion of, if not all, the amount due, 
the only difference being that the unrealized balance represents douceurs 
paid to the revenue officials. There is either some truth in this view of the case 
or the revenue officials are to blame for giving the contract to men of straw. 
The utmost apathy has also been shown in permitting the contractors to retain 
the contract after default in their monthly payments and in not attempting to 
realise the State’s dues by direct management after default had occurred. 

110. In Kashmir the spirit sold is said to be distilled from apples. There 
is only one shop for its sale in Srinagar. The distil¬ 
lery is at Gupkar near Srinagar. The shopkeeper is in 

the position of a contractor. He gets a discount of 7 per cent, on all purchases of 
liquors. Red and white wines are also manufactured at Gupkar. Opium has been 
given on contract since last year, “ Churus ” is also let out on contract. The 
opium contract fetched Rs. 330 a year and the “ Churus” contract Rs. 3,955 a 
vear. 

In Jammu there is a Sadar distillery and the usual Indian system is 
followed. There is also in Jammu a contract for the sale of opium, “ Bhung ” 
and “ Churus.” 

The English liquor contract fetches Rs. 660 a year; the opium, &c., contract 
Rs. 7,600 a year. Last year’s excise receipts in Jammu were Rs. 16,191 qnly. 
It is almost impossible for me to judge whether the receipts are fair. So far as 
I can judge the Jammu revenue is far too small. But the same remarks apply 
as in the case of all other contracts. 

Little care seems to be taken to ascertain that the contractor is solvent. There 
seems to be little or no competition. Proper security is not taken from the con¬ 
tractor. No effort is made to introduce fresh bidders or to reduce the size of the 
contracts so as to be within the reach of small men. 

I am, of course, aware that circulars have been issued on the subject by the 
Revenue Department. These circulars, bad copies very often of Panjab circulars, 
having once issued, it is evidently thought that nothing more is required. 

111. A very good red and a white wine are produced at the Gupkar Distil¬ 

lery. The wine costs about Rs. 7 a dozen to manu- 
W me and cider. facture and is sold retail at Rs. 14 a dozen. These wines 

are drunk to a certain extent in Kashmir, hut the sale is limited almost entirely 
to Europeans, and it will hardly pay to export them in India. The Kashmir 
authorities desire that the excise duty in India should be lowered in their favour 
so as to enable them to make a profit on their wines, but it seems to me to be 
very doubtful whether any such arrangement is feasible, and it would be far 
better to reduce the retail price to some extent and thereby endeavour to sell the 
wine in India at a smaller profit per dozen than is at present realised, the en¬ 
hanced sale compensating for the smaller profit. At the instance of Mr. Lawrence, 
the Settlement Officer, a small quantity of cider has been manufactured this year, 
and it is hoped that 15,000 quart bottles can be produced for sale. The cider 
is excellent in quality and can, I understand, be produced at about Rs. 3 a dozen. 
If so, it should have a wide and profitable sale. It would probably be a good 
plan to endeavour to get some good firm, European or Native, to undertake the 
contract for the sale of wine and cider, as by this means the sale could be pushed. 

112. The State property in British India consists of buildings, gardens, 

and arable lands and villages. The State 'owns 28 
State property m British India, houses j n Lahore, Mian Mir, Mooltan, Dalhousie, Siai- 
kote and Jlielum— besides houses at Murree and at Simla. The number of native 
houses is 142 in Lahore, Mian Mir, Mooltan, Amritsar, Dalhousie and Sialkote. 


32 


The number of native shops is said to be 719, of Serais 3, of Jhilars (irrigation 
wells) and pieces of land 8. In addition the State owns a village in the Lahore 
District named Porab and a large £ Eakh * called Jallo near Lahore which has an 
area of 4,800 bighas. 

113. The whole of the State property is leased to a contractor, a well- 
known and wealthy man, Pandit Janardhan of Delhi* 
tractor 6rty t0 & ^ for Es. 35,000ayear. The amount is obviously absurdly 

small, and in the Pandit’s own opinion the estate of 
Jallo alone, which produces Es. 9,500 a year, is worth about Es. 20,000 a year. 
Mismanagement is of course the chief cause of the bad state of the property. If 
the property either in whole or in part is worth retaining, the plan of leasing it 
to a respectable and wealthy man is not without its advantages. But the con¬ 
tract with Pandit Janardhan was scarcely settled before disputes arose regarding 
the item of repairs, and the result is that instead of Es. 35,000 only Es. 16,200 
were realised last year. The explanation given by the Eevenue Member is as 
follows:— 

“ It seems that the contractor has not obtained sanction of the Council 
through the Governor for the amount spent by him on repairs in excess of 
budget grant, and therefore he, under pretence of excess expenditure, stopped 
payment of the amount shown in decrease. The Governor for want of sanction 
shows the amount in arrears. This will be settled by the Council and will be 
reported next year (Samvat 1948).” 

Nothing has even yet been done to settle the dispute with the contractor. 
It is very clear that the contract was carelessly drawn up or that subsequent 
and apparently improper amendments were introduced, or that great delay has 
ocourred. in compelling the complete execution of the contract. 


114. I am strongly of opinion that by far the better plan would be to sell 
the larger portion of the State property in India. The 
Suggested sde of larger houses a t Murreo, Simla, Dalhousie and other places 
frfia 0 P P y might very well be sold. Any Serais or lands which 

have a sentimental value might be retained ; for the 
rest, everything should be disposed of, the dispute with the contractor patched 
up and settled, and the item removed from the revenue accounts of the State. 
The value of the State property in India has been estimated at from 10 to 20 
lakhs of rupees—the latter being the valuation of a Native banker in the Panjab 
who is well acquainted with it. 


115. 

Judicial 

receipts. 


I haye already (paragraphs 61 —65) remarked on the stamp revenue 
and postal and telegraph receipts. Judicial fines 
ne3 an Jai pnd j ail receipts do nof appear to call for detailed 
comment. 


116. The contracts pf State monopolies are very numerous. There are at 
n A least 38 in Kashmir and 17 in Jaipmu. They are of 

polieg ° ' a 6 m0D °' the most diverse description. By far the largest receipts 

are from the tax on buffaloes, cows, gqats and sheep 
in Kashmir. Other items are receipts from gardens, a carriage qr * ekka ’ tax 
hunting licenses, saffron cultivation, nazuf. buildings, bungalows in the Munslii 
Bagh at Srinagar, income from the State stables, hill grazing fees, the opium and 
poppy contract, profit from the Mint at Jammu, porters of the Modikhana (State 
Supply or Commissariat Department), rent of Maharaj Gunj shops, dry sweenino-s 
Gulmarg bazar fees, and the like. 


These receipts are partly realized from contractors, but in many cases direct 
by State officials. Most of the receipts are susceptible of classification upder 
various revenue heads apd should be so classified and not lumped together* 
The only explanation of the decrease on the estimates is that the actuals entered 
are what were actually received! There is, however, no reason to doubt that the 
contractors became defaulters in respect to some of the more important con¬ 
tracts and a decrease in the actuals was the result. 


117. The Government promissory notes, the interest on which appears as 

Interest i^'° f revenue , are promissory notes which belong 

to the Eeserve Treasuries of the State. Thev are refer¬ 
red to in paragraphs 212 and 213. ^ - 7 


38 


118. The forests of the State are most valuable. They have been neglected 
Forests. and badly worked in the past. But at the instance of 

the Resident, I believe, a trained Forest Officer from 
the Panjab, Mr. McDonnell, has been placed in charge of the State forests, and 
if he is properly supported he will do a great deal of good work and add largely 
to the revenue of the State. It is, in fact, to the forests that I look for the 
earliest and most rapid development of revenue in the State; and it is sufficient 
to remark that while the net receipts last year were only about Rs. 1,90,000, the 
estimated receipts of the current year, as recently revised by Mr. McDonnell and 
myself, amount to Rs. 3,20,000. Mr. McDonnell is, I believe, an excellent Forest 
Officer. He is perhaps just a little too anxious to introduce a rigid system of 
forestry in the State, and in doing so a certain amount of friction may ensue. 
A little judicious advice will doubtless smooth over any points of contact 
between the Forest and other Departments of the State. 


119. The amount of money due by various individuals and departments 
for wood supplied by the Forest Department at various 
times, amounts to a large sum—between 8 and 9 lakhs 
of rupees at least. The Conservator should be assisted 
in his efforts to recover the whole or a portion of this amount. 


Amounts due to the Forest 
Department. 


120. The receipts from sericulture were extremely small in Sam vat 1947 

Sericulture and will be still less in the current year. There is a 

silk reeling establishment in Srinagar under the super¬ 
intendence of Mr. Nogesh Comar Gfhose, a Bengali gentleman, who seems to 
understand his work. The officer who is in general charge of the depart¬ 
ment is Mr. Rishibar Mukerji (Barrister-at-Law), the Chief Judge of Kashmir. 
Mr. Mukerji draws Rs. 125 a month for looking after the work, but his adminis¬ 
tration of the department has not proved very satisfactory, and I understand that 
Mr. Lawrence, the Settlement Officer, has taken over the general control of the 
department. Formerly the industry was very flourishing ; the receipts are said 
to have amounted at one time to nearly 4 lakhs of rupees a year. ‘ Pebrine ’ 
destroyed large numbers of the silk-worms and neglect completed the ruin of 
the industry. If it can be revived Mr. Lawrence is the man to do it, but there 
must be no more of that “ want of proper supervision ” at the time the silk¬ 
worms are hatching which distinguished last year’s mismanagement of the 
department. 

121. In this department, too, there are heavy arrears due by villagers 

and officers of the State, to the extent of at least 
Amounts due to the silk 1^50,000, but no serious efforts have hitherto been 
factory- made to effect recovery. 

122. Hops did not succeed very well last year. The crop is rather a 

precarious one. But there is no reason why it should 
Hop8> not yield a fair profit. The Murree Brewery Com¬ 

pany (Limited) are willing purchasers of good hops, and it is hoped that a fair 
profit will be realised in the current year. The working of the hops gardens is 
supervised by Mr. Lawrence and he is managing them on commercial principles. 
An offer was recently made by a European gentleman to work the hop gardens 
on contract, his terms being advantageous to the State. The Council, however, 
declined to sanction the arrangement, which is, I think, to be regretted. 

123. The direct receipts from the State’s vineyards at the Chasma Shahi 

Gardens on the Dhul lake are comparativelv small. 
Vineyards. But t he grapes are used in the Gupkar Distillery. 

The charges in connection with the vineyards are comparatively heavy, as two 
Italians are employed as overseers. The vineyards will, however, I believe, 
become more remunerative year by year, and the State is anxious to keep them 
ud as they were started by the late Maharaja Ranbir Singh. I have never 
seen finer grapes in India than those produced at the “ Chasma Shahi ” Gardens, 
and when the crop is a good one they compare favourably with the grapes pro¬ 
duced in most parts of Europe. 

con 1420—9 


34 


124. The miscellaneous revenue was estimated at Es. 4,14,700, but the 

•w- i, _ actuals were Es. 2,01,634 only. The heaviest decrease 

was in the item ‘ sale of sapphires. The State pos¬ 
sessed a valuable sapphire mine in Zanskar, which has, however, according to Eaja 
Amar Singh, been destroyed by a landslip. The State stock of sapphires was 
valued by a jeweller, at Jammu I believe, at 10 lakhs of rupees. The valuation 
cannot be depended on, as is proved by the, fact that the State was entirely 
unable to dispose of the sapphires valued at 2 lakhs of rupees placed on the 
market in Samvat 1947. I believe the highest bid for the lot was Es. 30,000, 
The valuation was evidently far in excess of the real value, and a safer estimate 
would have been Es. 50,000. However the State has recently come to an 
arrangement with Messrs. Sohone Kilburn & Co. of Calcutta to act as its agents 
for the sale of sapphires and Messrs. Schone Kilburn & Co. have recently sold 
a box of sapphires valued at Es. 60,000 for about Es. 49,000 net. The Council 
did not appear at all anxious to accept the offer made, but all things considered, 
it was obviously in the best interests of the State to accept the money. 

125. Among the miscellaneous items of revenue is the revenue derived 

« Knt , root from the sale of e Kut ’ root. The ‘ Kut ’ or Orris root 

(Aucklandia costus, also called Aplotaxia auriculata) 
is collected on the hills and is bought by merchants for export to China, where 
it is used in the manufacture of Joss sticks. The State pays from Es. 20,000 to 
Es. 25,000 a year for collecting it and the amount realised by its sale varies from 
Es. 40,000 to Es. 50,000 a year. Here, too, the want of some knowledge of 
commercial principles operates unfavourably. The principle on which the 
Council appears to act is to try to get a little more than the highest bidder is 
prepared to give. The result often is that the highest bidder draws back, and 
unless the State chooses, as to tell the truth it frequently does, to store its pro¬ 
duce and expose it to deterioration, the final price accepted is lower than the 
highest price offered. 

126. The only item in which the estimate of Samvat 1947 was exceeded is 

Realization of arrears. that of reallza tion of arrears. What the amount of 
arrears nominally or really is it is quite impossible to 
estimate with any approach to accuracy. The ‘ Bakidar 5 (arrears) question, as it 
is termed, was taken up with some care in 1888 and the results were reported to 
the Government of India. The total amount then alleged to be due to the State 
amounted to 3 krors and 5 lakhs of rupees. A number of cases were thoroushlv 
enquired into by Captain H. Eamsay and he decreed Es. 1,11,856 as due to the 
State out of claims amounting to Es. 6,03,268. I cannot, however, find that as 
the result ot these decrees any amounts of importance have been realised 
anditis not at all improbable that the men considered to be *Bakidars’ in 
1888 are ‘ Bakidars ’ still. The amounts realised as arrears in Samvat 1947 
we *? prineipeilly arrears of land revenue. Small amounts are occasionally 
realised by the State from other ‘ Bakidars,’ but the vast majority of the claims 
are not worth the paper they are written on. Many of the debts are purelv 
fictitious Some amounts have been paid to officials, by whom they have been 
embezzled; m some _cases the debtors are dead, in others they are bankrunt 
and a few are in British territory and not approachable. It would I think be 
a wise plan for the Council to deal once for all with the ‘ Bakidar ’ Question 
to sift the claims and wipe off all irrecoverable claims, to take mdicious 
measures to realise recoverable claims, and to publish a clear resolution of the 
Council abandoning all claims considered to be irrecoverable. Anv pronosals to 
compound claims should be favourably entertained and if 10 lakhs or even 
5 lakhs of rupees could be realised during the next financial year on account 
of arrears accrued before Samvat 1946, I should consider it an excellent Zi 
final settlement of ‘Bakidar’ claims which had accrued prior to that year^ d 

* 127 ' ** 18 re markable that no credits appear in the accounts which re- 
No credits from Public receipts . fro . m the Public Works, Medical 

Works, Medical, &c. stationery and Printing, Educational or Police Depart- 

+ i ,, ... ments. The explanation is that any such credits am 

taken on the expenditure side against these heads, which are then shown net. 


35 


128. 


The Civil List. 


In regard to expenditure, the first and one of the heaviest items is 
that of the Civil List. This includes the allowances 
. a . , °f His Highness the Maharaja, Raja Ram Singh, Raja 

Amar Singh and Raja Moti Singh, the Chief of the feudatory State of Punch 
and the first cousin once removed of the Maharaja. 


129. The allowances consist of cash payments, mostly made monthly, and 
Nature Of the Civil List. supplies in kind furnished to the Maharaja and his 
. brothers by what is called the Modikhana. The 

Modikhana is a sort of State Purveying or Commissariat Department from which 
almost, if not all, the food used in the kitchens of the palaces is supplied. In 
addition a number of servants, the dependents of the Maharaja, and the ladies 
ot the palace are entitled to supplies from the Modikhana, and supplies are also 
made by it to the Maharaja’s stables, to State guests and others. The supplies are 
furnished by various contractors on indent. The contract rates for each article 
are loosely fixed, and the contractors’ bills are on presentation paid at the treasury 
either at Jammu or at Srinagar. Very little delay in payment of these bills or in 
payment of the Maharaja’s cash allowance ever takes place. These claims must 
lie paid, no matter what the state of the balance in the treasury may be. The 
Modikhana has, I believe, been in existence since the time of Maharaja Gulab 
Singh. 

As regards the cash allowances generally, I have found it very difficult to 
arrive at any approximately accurate figures. Before Samvat 1945 no accounts 
seem to have been kept of these allowances, and even after that year the figures 
are not very clear. 


130. As regards the Maharaja’s cash allowances, it may be noted that 
The Mahuraja’. cash .How- Maharaja Ranbir Singh died in Samvat 1942. I can- 

ance. not ascertain from any accounts what the present 

Maharaja allowed himself from the ordinary revenue 
of the State during Samvats 1942, 1943 and 1944. Prom a report made to the 
Government of India in 1890 by the late Resident, it would, however, appear that 
the present Maharaja, whatever he drew from ordinary revenues, drew in addi¬ 
tion 34 lakhs of rupees from the Reserve Treasuries shortly after his accession,.all 
of which he spent on himself (Colonel Parry Nisbet’s letter to the Govern¬ 
ment of India, Foreign Department, No. 15-L, dated 29th January 1890, para¬ 
graph 70). 

Before his father’s death also he had withdrawn secretly, it is said, a sum of 
Rs. 71,115 from the great charitable fund—the Dharmarth Fund—of the State. 

131. According to a statement furnished to the present Resident by the 
Maharaja himself his personal allowance for Samvat 1945 amounted to 
Rs. 5,67,770, which included Rs. 20,850 for stable gear and Rs. 39,208 for * rasad ’ 
(supplies in kind) of Banduquias (matchlock-men), &c. 

His real private allowance in cash for that year was therefore Rs. 5,07,712. 
In addition, the value of supplies in kind furnished by the Modikhana for his 
kitchen, private staff, stables and Zenana amounted to 131,746 Kashmiri 
maunds of 16 imperial seers weight, equal to 62,698 imperial maunds. 


132. It is quite impossible to say whether the cash and kind thus 
received by the Maharaja are greater, equal to or less than what was received by 
his father. One statement furnished by Raja Amar Singh shows that Maharaja 
Ranbir Singh drew on an average of three years Rs. 3,79,970 a year against 
Rs. 6,09,464 drawn by the present Maharaja, and supplies in kind, value 
Rs. 68,184, against supplies in kind drawn by the present Maharaja, value 
Rs. 1,26,312. Another statement furnished by the Maharaja himself shows his 
cash allowances to be lj lakh of rupees less than what his father received and 
the supplies in kind to be* less by 35,000 Kashmiri maunds (14,000 imperial 
maunds). 

133. The fact is that no accounts prior to Samvat 1945 or Samvat 1946 
on which any reliance can he placed are forthcoming, and the real question is 
whether the Maharaja’s present allowance is more than the State can afford to 


36 


pay. The estimates and actuals of the Civil List expenditure in Samvat 1946 
are as follows :— 


Cash allowance of His Highness and the Piinces ... 6,71,173 

Modikhana supplies 
Travelling allowance 

Total 

The actuals differ from those given in a report to the Government of India 
by the late Resident which bring the total to Rs. 10,43,969. The figures include 
the allowance of the Maharaja and his brothers. 


Estimates. 

Actuals. 

Rs. 

Rs. 

6,71,173 

6,17,142 

4,13,161 

3,11,818 

12,000 

21,567 

10,96,334 

9,50,527 


Estimate and actuals 
Samvat 1947. 


of 134. The estimates and actuals for Samvat 1947 
are as follows :—• 


Cash allowance of His Highness 
Modikhana supplies, including supplies to Raja 
Ram Singh, Raja Amar Singh, and Raja 
Moti Singh 

Travelling allowance of His Highness 


Estimates. 

Actuals. 

Rs. 

Rs. 

6,55,270 

6,51,521 

3,52,038 

3,31,677 

18,157 

30,892 


Cash allowance of Raja Ram Singh 
Do. Amar Singh 

Do. Moti Singh 

Deori Khas (ladies of tlie palace) 
Unforeseen expenses 

Total 


10,25,465 

4,795 

1,199 

8,590 

1,319 

26,530 

10,67,898 


27,843 

10,41,933 


The actuals apparently include all the separate items except unforeseen 
expenses, and they cannot be given in detail. 

The estimates for Samvat 1948 are as 


Estimate and 
Samvat 1948. 


actuals of 


135. 

follows 


Cash allowance of His Highness ... 
Modikhana supplies ... 

Travelling allowance of His Highness 

... 

Estimates. 

Rs. 

... 5,93,561 

... 3,21,665 
20,000 

Cash allowance of Raja Ram Singh 

Do. Amar Singh 

Do. Moti Singh 

Deori Khas (ladies of the palace) 

Marriage expenses of Raja Ram Singh 
Unforeseen expenses • 

... 

9,35,226 
6,229 
5,608 
8,590 
1,319 
16,810 
... 50,000 


Total 

10,23,782 


These items do not repre- 136. These items, however, do not in anv wav 

tte s" e a , nd tte *?? char s e to th ® 

j State on account of the Maharaja and his family. 

The Maharaja owns Jaghir villages, which Raja Amar Singh has stated 
to be worth Rs. 8,000 a year. Raja Ram Singh and Raja Amar Singh have 
each got Jaghirs worth, it is said, 1-| lakh of rupees a year. Raja Moti Sin°-h of 
Punch is a man of immense wealth. Original works and repairs to palace? are 
estimated to cost nearly 1| lakh of rupees in the current year. The Maharaja 
r e f fiSy ° f th f 1 J ewell ® r y purchased every year by the State, and he alone has a 
fist ot this jewellery. The jewellery is estimated to cost Rs. 11,000 in the current 
year. Ihe Maharaja s physician draws Rs. 375 a month from the State and has 
been allowed a lump sum of Rs. 1,000 to purchase medicines in the current year. 
Ike Maharaja has got clerks and servants paid by the State. J 














37 


He has drawn in the current year Rs. 8,000 as travelling allowance for a 
pilgrimage to the Ganges. Raja Amar Singh has stated that in addition to the 
known amounts in the Reserve Treasuries five lakhs of rupees were deposited in 
the palace at Jammu, which have, however, he believes, disappeared. In fact, it 
is no exaggeration to say that in addition to the Civil List every department of 
the State contributes to the support of the Maharaja’s dependents and servants. 


137. It must, however, be remembered that the Modikhana charges include 

The Modikhana charges. ? 0t A*® Ma J 1 . ara j a > b " t tto ? e ° f hi ? 

family. I he details, accordmg to the estimates of 

Sam vat 1948, so far as I can extract them, are as follows:— 


Modikhana Estimate, Samvat 1948. 


Supplies to the Maharaja ... 
jj „ Raja Ram Siugh 

,, ,, Amar Singh 

,> „ Moti Singh 

Alms, &c. 

Miscellaneous ... 

■“Hire for-imports (cost of carriage of supplies) ... 

Palace expenditure 

Panj Garain Palace 

Rasad Khawars (free rationers) 

Fluctuation of rates and extraordinary expenditure 
Repairs to Modikhana house, Kothi Basant Bagh ... 


Rs. 


... 1,59,000 
... 37,000 

... 30,000 

7,000 
2,000 
1,000 
1,165 
... 36,000 

6,000 
... 17,000 

... 25,000 

500 


Total ... 3,21,665 


I cannot break up the actuals of Samvat 1947 in the same detail. 

138. I have made a careful estimate of the distribution of the cash allow¬ 
ance and Modikhana supplies between the Maharaja, 
Estimated cash and Modi- brothers and Raja Moti Singh according to the 
khana allowances. original budget of Samvat 1948. The resultris as 

follows :— 


Rs. 


Civil List of His Highness the Maharaja ... ... 8,93,561 

„ Raja Ram Singh ... ... ... 68,039 

„ Raja A mar Singh ... ... ... 41,608 

„ Raja Moti Singh ... ... ... 20,574 


Total ...10,23,782 


Raja Ram Singh’s allowance includes Rs. 16,810 for marriage expenses, 
which will not recur for the present at any rate. 

139. As it is abundantly clear from the statements of income and expen¬ 
diture already given and the detailed examination of 
Question whether the Civil ^he accounts that the expenditure of the State is 
tion F considerably m excess of the revenue, it is of great 

importance to ascertain whether the Civil List is 

susceptible of reduction. 

As regards the Maharaja, his own accounts show that in Samvat 1945 he 
received in cash Rs. 5,07,712 only. Stable gear does not require to be renewed at 
an annual cost of Rs. 21,000 and “ rasad ” belongs to the Modikhana. It is 
not therefore clear why the Maharaja was allowed to draw in cash Rs. 6,51,521 
in Samvat 1947 or why Rs. 5,93,561 are estimated as his cash allowance in 
S.amvat 1948. He certainly would not exaggerate the amount drawn by him 
in Samvat 1945, and the actual amount drawn by him was perhaps less, 
cox 14.2,0—10 






38 


140. The Modikhana supplies to the Maharaja 
Modikhana supplies to the are made on a most extravagant scale. The following 
Maharaja. is a detail of a few of the items in the Jammu accounts 

for Samvat 1947 :— 




Imperial Maunds. 

Value. 




Rs. 

Wheat of all sorts ... 


... 3,709 

7,706 

Gram 

... 

... 8,628 

7,252 

Barley ... 

... 

... 15,162 

24,250 

Rice 


... 2,969 

13,758 

Ghi 


651 

17,753 

Oil 


393 

4,608 

Salt 


369 

1,451 


The quantities supplied are enormous, and it is evident that there must be 
great waste or that articles are charged for which are never supplied. 

The Kashmir items are similar, but the quantities are much smaller as the 
Maharaja usually resides at Jammu. They are not included in the above. 

141. I am of opinion that a considerable reduction in the Maharaja’s cash 
_ ., ,, 1 allowance and Modikhana supplies is not only reason- 

necessary 6 ™ 6 ^ uctlon able, but an ahsoluie necessity in the present condition 

of the finances of the State. 

I think that the total allowances of Raja Ram Singh and Raja Amar Singh 
might be fixed in round figures at Rs. 50,000 each. They both perform im¬ 
portant State duties, and at present receive no renumeration whatever for doing 

so. 

I cannot see that Raja Moti Singh has any claim whatever to an allowance 
from the State and I would discontinue it. 

Proposals regarding the Civil List. 142. I would propose :— 

(1) That the Maharaja’s cash allowance be fixed at'5 lakhs of rupees a year, 
this sum to include all travelling and other charges. 

(2) That the Modikhana be abolished as a department of the State. The 
contractors who have hitherto arranged for supplies may continue, if 
acceptable to the Maharaja and his family, to do so, but must look for 
payment to the Maharaja and the members of his family and not to 
the State. 

(3) That one lakh of rupees a year be granted to the Maharaja in lieu of 
all Modikhana supplies, on the understanding that out of this sum he 
must pa,y for his own supplies, for those of the inner palace which 
appertain to him and for supplies to all Rasad Khawars (free rationers) 
who have hitherto received supplies as being his dependents. 

(4) That considering that Raja Ram Singh and itaja Amar Singh at pre¬ 
sent draw in cash and from the Modikhana Rs. 43,229 and Rs. 35,608 
respectively and perform high duties in the State, they be granted 
an annual allowance of Rs. 50,000 each. Such sum to cover all cash 
and Modikhana supplies, all supplies to the inner palace appertaining to 
them, and also anything pertaining to the Rasad Khawars for which 
they are responsible. 

(5) That all cash and Modikhana allowances to Raja Moti Singh, the inner 
palace and the Rasad Khawars shall cease. 

(6) That any Modikhana payments in connection with the Stables, Barracks 
Military, &c., shall cease, compensation being, if necessary, given by 
the State, but such compensation in no case to exceed the lowest 
charges incurred in any one of the years Samvat 1945-47 inclusive. 

(7) That the charges in connection with the Deori Khas and Pani Garain 

palaces in respect to Modikhana allowances shall be borne by the 
ivianaraia. * 

(8) That, all existing paid Modikhana officials be discharged from the 

service of the State. & 













39 


143. The total charges in future, if these proposals are agreed to, would he 

Future CM List if pro- f lakh s of rupees a year for the Maharaja and one 
posals are agreed to. lakh °* ru P ees a year lor the two Rajas, or 7 lakhs of 

rupees in all—a reduction of at least 3 lakhs of 
rupees. I am of opinion that the proposed allowance to the Maharaja is most 
liberal. The former Resident was of opinion in 1890 that a cash allowance of 
3 lakhs of rupees would he liberal, hut he did not take any serious steps to 
ensure a reduction of the Maharaja’s allowance to this sum. 

144. It cannot, of course, he expected that the Maharaja will willingly 
agreee to a reduction in his annual allowances amounting to nearly 3 lakhs 
of rupees. I am, however, of opinion that the reduction is absolutely necessary 
to ensure equilibrium between the State revenue and expenditure, that consider¬ 
ing the Maharaja’s position at present an allowance of 6 lakhs of rupees is 
ample and is as much as the State can afford, and that the cash allowance of the 
Maharaja has been allowed to increase during the last three years without 
adequate reason. It is, in my opinion, the duty of the Council to place the facts 
relating to the financial position of the State before the Maharaja and to con¬ 
vince him that the reduction is not only reasonable hut an actual necessity. 
The Maharaja may not he willing to accept the reduction, hut it should at any 
rate he possible to prove to him that there is no alternative hut a reduction in 
his allowances, if necessary subject to reconsideration in (say) three years, or the 
speedy depletion of the cash in the Reserve Treasuries, and when the cash is 
exhausted a hopeless condition of financial difficulty. 

145. The estimated number of combatants and non-combatants in the 

The army. army in Samvat 1947 and Samvat 1948 is as follows :— 



Samvat 1947. 

Samvat 1948. 


Combatants. 

N on- combatants. 

Combatants. 

Non-combatants. 

Imperial Service Corps ... 

2,656 

228 

3,925 

379 

Regular Troops ... 

8,284 

1,075 

4,252 

399 

Total 

10,940 

1,303 

8,177 

778 


It is probable that by the end of next year the strength of the Imperial 
Service Corps will he complete and the numbers will then stand :— 


Combatants 

Imperial Service Corps ... ... 4,397 

Regular Troops ... ... ... 3,900 

Total ... 8,297 664 


The Imperial Service Corps will then consist of a general staff, 2 mountain 
batteries, 1 cavalry regiment, and 6 infantry battalions. It is possible that 
200 combatants and 20 non-combatants may be added to the Imperial Service 
Corps and deducted from the regular troops if the garrison gunners employed 
at Gilgit are amalgamated with the Imperial Service Corps. 

There are two brigades, one at Jammu and the other at Gilgit. 

146. Taking it as a whole, I think that more vigour is displayed and better 
value is obtained for the money spent in the Military Department than in any 
other department of the State. This is in part due to the interest displayed by 
the Commander-in-Chief, Raja Ram Singh, and in part to the excellent work 
performed by the Military Secretary, Colonel Neville Chamberlain. The men 
of the Imperial Service Corps are in a fair state of efficiency and the regular 
troops are being reduced in number and made more useful. The estimates have 
shared in the faults of all other Kashmir estimates. They have included arrears 


Non-combatants. 

264 

400 














40 


of which, there was no hope of payment and have dealt with estimates instead 
of actuals and so on. But these defects will now, I believe, be rectified and 
arrears will be paid off. 

147. I have endeavoured with very little success to ascertain the former 

numerical strength of the army and its cost. As 
Former and present strength re g ar( j s the strength of the army the best information 

I have obtained is summarised m the following 
remarks of the State Council (Quarterly Progress Report, 1st August to 31st 
October 1889):— 

“ It would not he here out of place to make a passing allusion to the 
annals of the Kashmir State in regard to its military strength in former 
years. In numbers the strength is said to have approached the fabulous 
figure of 60,000 in the time of Maharaja Gulab Singh, between 30 and 40 
thousand during the reign of Maharaja Ranbir Singh, and between 23 and 30 
thousand in that of the present Chief. But to say that all these troops were 
in receipt of regular pay and that in point of efficiency and discipline they 
were qualified to rank as soldiers, is more romantic than real. The sepoys 
were, as a rule, clothed in rags and very badly armed, and generally worked 
in their fields as agriculturists until actually required for military service. 
That the troops were a heavy and unbearable burden on the finances was 
appreciated only when cash payments were partially introduced, though 
even then the effect was not strongly felt, as payments were put off from 
time to time and pressing calls were readily met from the Reserve Treasury 
at Riasi,” 

There can he very little doubt that a large portion of the army formerly 
consisted simply of agriculturists, who at times rendered military service just 
as they at present render ‘begar’ (forced labour). It is only on this view that 
the reduction, in the strength of the so-called army without serious disturbance 
can be accounted for. The former sepoys have returned to their agricultural 
pursuits. 

On 31st December 1886 the total strength of the army was 13,368; it is 
now 8,955. 

148. As regards cost, I have been informed that in the time of the late 
Maharaja it amounted to 21 or 22 lakhs of rupees. This amount, however, was 
certainly never disbursed in cash, and was, I believe, the nominal cost of the 
army. Large supplies in kind were, without doubt, made to the army and still 
larger amounts charged for. The supplies were converted into cash at the State’s 
commutation rates, and it is well-known that in some instances these commuta¬ 
tion rates are in excess of the market rates. For the rest, cash was as sparingly 
doled out as possible. Making all these allowances, however, I cannot believe 
that the army cost less than 15 or 16 lakhs of rupees to the State in the time of 
the late Maharaja, and with this expenditure it was little better than a badly 
clothed, badly fed rabble. Disturbances on the Gilgit frontier must have cost 
the State enormous sums in the past. The difficulties attendant on the mov ing 
of troops and supplies to Gilgit are serious enough now, but in former years they 
must have been at times almost insuperable. 


149. The present pay of a sepoy in the Imperial Service Corps is Rs. 7 a 

month, of a sepoy belonging to the Regular Troops 
ay O t e sepoys. R s> q a m0 nth. Without full dress, for which no 

estimate is available, the cost of equipment of a sepoy in the Imperial Service 
Corps is about Rs. 71-8. The Regular Troops are not as yet properly equipped 
and no estimate of the cost of their equipment can be given. The stoppages 
from the sepoy in the Imperial Service Corps on account of clothing are Re. 1 a 
month, from a sepoy belonging to the Regular Troops annas 8 a month. The 
Cavalry pay Rs. 2r8 a man a month towards clothing. 

150. With the sanction of the Commander-in-Chief and the Council 

. t„ Colonel Chamberlain has established a number of 

Pegimen a an s, regimental funds, e.g., the ordinary Regimental funds 


41 


Chanda fund, Divisional fund, Ration fund, and Naibundi fund. These funds are 
managed in accordance with the standing orders for the army, as sanctioned by the 
Council. A regular clothing fund is being formed as one of the Divisional funds. 
1 he amounts to be deducted under this heading are laid down in the standing orders 
for the Imperial Service Corps. A list of clothing, &c., to be provided free of 
charge by the State is also laid down in these orders. Any articles which do 
not appear in this list are paid for by the troops. The balance which remains 
to the credit of the fund after defraying the cost of all articles given free of 
cost to the troops is the property of the State. This is referred to in the 
explanatory note on page 40 of the Military Budget for Samvat 1948. It is 
proposed to keep the balance in the Military Treasure Chest, and to add to it 
all further deductions as they accrue so as to form eventually a regular “ cloth¬ 
ing fund.” This has been strongly recommendel by the inspecting officers. 
Had it not been for this and other funds, the administration of the Military 
Department must have repeatedly come to a standstill owing to want of money. 

It is however hoped that in future want of money will not oblige the mili¬ 
tary authorities to have recourse to the balance at credit of the military funds, 
and that the balances of these funds will in future be kept in the State 
treasuries. 

151. As regards the present and future cost of the army, the cost as 

, n , . ,entered in the revised budget for the current year is 

Present coat of tbe army. ^ 11,64,338. Once the Imperial Service Corps has 

been fully equipped, the yearly expenditure should not exceed this sum, say 
llg lakhs of rupees. But until the equipment of the Imperial Service Corps is 
complete, another lakh of rupees a year may be required. 

152. The carriage of grain to Gilgit is a most serious item in the estimates. 

_ , . The amount entered in the original estimates of the 

aruage o gram to 1 gi . currer q year was Rs. 38,800, but the revised estimate is 
Rs. 1,19,600 or more than 10 per cent, of the total cost of the army. It seems to 
be impossible to do the work for less, so long as the entire frontier garrison is kept 
in the Gilgit valley. A very small quantity of supplies can be procured in the 
valley, all the rest require to be sent up from Kashmir. Once the Indus bridge 
has been completed, and a certain amount of friendship established with Hunza 
and IN agar, it might be feasible to retain at Gilgit only as many troops as the 
resources of the country trans-Indus can feed. As many troops as possible 
might be located in the highlands round Astor in the summer, and they might 
be moved down to Ramghat and Bunji (3,500 feet) from November to the end 
of April. This would leave a nominal garrison trans-Indus. 

I am not competent to form an opinion on this important military question. 
All that can be said is that if feasible it would save at least half a lakh of rupees 
.a year in the matter of transport. 

153. Summing up my views on the question of the army expenditure 

in the State, I would record that, in my opinion, the 
Summary of views regard- p resen t CO st 0 f the army is less by several lakhs of 
mg ie army. rupees than it was in the time of Maharaja Ranbir 

Singh. It is true that the present expenditure is almost entirely in cash, while 
a large proportion of the former expenditure was probably in kind. As, however, 
improved revenue administration will result in the revenue in kind or the greater 
portion of it being commuted into cash, and as such paid into the State treasury, 

I believe that existing arrangements indicate a real saving in cost. The army 
expenditure in future will not be less than 11 lakhs, and should not in 
ordinary years exceed 13 lakhs of rupees, and this sum the State is, in my opinion, 
quite able to spend on its army, provided the revenue administration is conducted 
in a proper manner and expenditure placed under proper control. 

As regards the benefit to the State of having a compact, -well-disciplined and 
well-armed body of troops, instead of the former horde of ragged half-drilled 
men, no comment is necessary. 

£ON 1420—11 


42 


154. The charges against the State Council represent the salaries of the 

x three members, Pandit Suraj Kaul, C.I.E., Pandit 
Council argeS ° r e ta e Bhag Bam and Sheikh Ghulam Mohiudin, with the 
office establishments of all the members, except the 
Commander-in-Chief. The cost of the Council is not excessive. The Foreign 
Department deals with the Toshakhana expenditure of the State representatives 
in India, with subsidies to frontier Chiefs, expenditure connected with various 
palaces, the Beserve Treasuries, Dak bungalows, a large number of State servants, 
Hajirbashes (probationers and persons waiting for employment) and a large 
amount of miscellaneous expenditure. Considerable reduction can be made in 
the charges to which reference is made in paragraph 200, and some re-arrange¬ 
ment of the branches dealt with by the Foreign Department would seem to be 
advisable. It would, for example, be more convenient to deal with Dak bungalows 
in the Be venue or Public Works Department, with the Library and Museum in 
the Bevenue or General Department, and so on. 

155. The Bevenue Department is a department in which also large reduc- 

_ t~. , tions in expenditure appear to be feasible (see para- 

The Revenue Department. graph 200) and in which it would be convenient to 
deal separately with various minor departments subordinate to the Bevenue 
Member. Thus the Bevenue Department proper, the Settlement Department, 
the Excise Department, the Forest Department, the Dharmarth or Charitable 
Department of the State, a department which spends 3^ lakhs of rupees a year 
and is totally distinct from the great Dharmarth Fund (paragraph 222), and* the 
Pension Department, though all managed by the Bevenue Member, should be 
classified separately in the accounts. The same remarks apply to the General 
and to the Judicial Departments. 

156. The Public Works Department is not, in my opinion, in a very 
m. t. w w i -n , satisfactory state. Major-General De Bourbel, B.E., 

merit. 6 U 16 ° r 8 epar " (retired), is the Chief Engineer on a salary of Bs. ‘1,200 
a month in addition to travelling allowance and 
house-rent. General De Bourbel was during the latter part of liis service in 
India principally employed as a Consulting Engineer, and while it must be 
admitted that he has many difficulties to contend with, it must also be stated 
that he scarcely seems to have a thorough grasp of the work; his estimates are 
heavy and the objects on which the State money is spent are sometimes scarcely 
judicious. He is to some extent hampered by the vicious system which obtains 
in the State, of carrying out many large works independently of him through the 
agency of the Governors, but I doubt whether it is advisable to re-employ him 
when his term of service expires in July 1892. He himself is anxious to 
continue in the service of the State for a further term even on a reduced salary 
of Bs. 1,000 a month. 


Superior Public 
Engineering staff. 


Works _ 157. The superior Engineering staff in the State 

is estimated to cost Bs. 84,800 in the current year. 


The total establishment charges in Samvat 1947 and the current year are as 
follows :— 



Samvat 1947. 

Samvat 1948. 


Actuals. 

Original. 

Revised. 


Rs. 

Rs. 

Rs. 

Establishment charges 

2,29,745 

1,77,171 

1,54,912 


Considering that the principal expenditure is on the Gilgit Boad (Bs. 5,40,000 
in the current year) and that less than 9 lakhs in all were spent on public works 
in Samvat 1947, the establishment charges appear to be excessive. The present 
superior staff consists of a Chief Engineer, 4 Executive Engineers, 3 Assistant 
Engineers, a Superintendent of Water-works, and a Supervisor of Water-works. 











43 


158. In my opinion there should he one Executive Engineer only for the 
p • • op. . whole State (excluding the Gilgit Road while under 
8 t,a. construction as this is quite a special work), 2 Assist¬ 

ant Engineers (one at present and two after the comple¬ 
tion of the Gilgit Road), 2 Supervisors and 1 Superintendent of the Jammu 
Water-works, on the following pay 

Rs. 

Executive Engineer, pay Rs. 1,000 + travelling allowance Rs. 150. 13,800 

2 Assistant Engineers „ ,, 500 + „ „ 100. 14,400 

2 Supervisors „ „ 300 + „ „ 100. 9,600 

1 Superintendent, Jammu Water-works, pay Rs. 200 ... ... 2,400 


Total ... 40,200 


Ordinary Public Works 
expeudituxe in future. 


159. I am also of opinion that, as a rule, the 
ordinary expenditure should not exceed the following 
amounts :— 


Rs. 


(1) Jammu Division with agencies ’... ... ... 1,50,000 

(2) Kashmir ... ... ... ... ... 1,50,000 

(3) Jhelum Valley Road ... ... ... ... 1,50,000 

(4) Miscellaneous ... ... ... ... 1,50,000 


Total ... 6,00,000 


This sum, of course, excludes the Gilgit Road and it refers to ordinary 
expenditure alone. 


160. 

The Gilgit Road 


As regards the Gilgit Road, it appears that the original intention was 
to spend Rs. 3,50,000 in opening up the road from 
Bandipur to Gilgit and to build a bridge over the Indus 
at Bunji at a cost of from Rs. 20,00(1 to Rs. 25,000. I fear it must be admitted that 
this estimate was entirely fallacious. It was probably prepared without any 
adequate knowledge of the extraordinarily difficult work which had to he under¬ 
taken, the utter impassableness at present of certain parts of the country over 
which the road is to be constructed except for lightly laden coolies, and the 
extreme rapidity and width at certain periods of the year of the Indus. The 
present contract for the Gilgit Road is for 230 miles at Rs. 3,500 a mile, equal to 
Ks. 8,05,000. The work has been undertaken by Messrs. Spedding & Co., and 
under their agreement must be finished in two years ending July 1892. The 
road will then be passable throughout for laden animals and possibly for very 
light carts, as it should be 10 feet wide and with gradients of 1 in 15 as a rule. 
Up to the end of Sarnvat 1947 Rs. 1,05,476 were spent on the road, about 
Rs. 5,50,000 will be spent in the current year, and the balance during the next 
financial year. 


161. There are, I am told, to be five large bridges on the road, including the 
bridge over the Indus. These bridges are not included 
The bridges on the Gilgit ]\q essrs> Spedding’s contract, and will, together with 
Road ' extra work, cost a sum not far short of two lakhs of 

rupees. The most important bridge of all, the Bunji bridge, will not probably 
be ready much before the end of next year. 

This bridge is to be, I understand, a steel wire rope suspension bridge, and 
serious delay lias been caused by alterations in the design and in the size of the 
wire ropes. The wire ropes must, I am told, be obtained from England, and I 
understand that the work of manufacture lias not even been begun yet. The 
ropes cannot now in any case be despatched from Srinagar before May 1892, 
even if they are ready and have been received by that time. In my opinion the 
delay that has occurred in the arrangements for building this bridge reflects dis¬ 
credit on the Public Works Department of the State, and, so far as I can learn, 





44 


the Chief Engineer is mostly to blame. The value of the road is most Materially 
reduced by the non-existence of the bridge, and no delay whatever should have 
been permitted to occur in its construction. 

162. The establishment and contingent charges average Rs. 45,000 a year, 
and the charges for repairs on the portions taken over 
ost o t e i git oa . f rom time to time from the contractors and until the 
road is finished will not fall short of Rs. 75,000. When the road is finally com¬ 
pleted the establishment and maintenance charges need not exceed Rs. 1,50,000 
a year. 

The cost of the road will therefore be as follows :— 

Rs. 

8,05,000 
1,35,000 
75,000 
2,00,000 

Total ... 12,15,000 


Rs. 1,05,476 were spent on the road in Samvat 1947, but only a portion of 
this sum can be taken against the cost estimated above. About 5-| lakhs of 
rupees will be paid in the current year. This leaves from 5| to 6 lakhs of rupees 
to complete the road, which can be provided for in the Budget for Samvat 1949. 
After Samvat 1949 the cost of maintaining the road should not, as already stated, 
exceed Rs. 1,50,000 a year, and while it must be admitted that the expenditure 
on the construction of the road during the current year and Samvat 1949 could 
not be met out of current revenue, it will be shown later on (paragraph 194) 
that, if my proposals regarding the Maharaja’s allowances, reductions in expen¬ 
diture and a more vigorous administration of the revenue are accepted, the State 
can, in my opinion, in addition to spending 6 lakhs or even 6| lakhs of rupees a 
year on its ordinary public works, afford to spend out of ordinary revenue 
Rs. 1,50,000 a year on the maintenance of the Gilgit Road and would still have 
4 lakhs of rupees available for extraordinary public works. Even if this 
amount were reduced by half and the total public works expenditure fixed at 
10 lakhs of rupees a year, I believe that, once the Gilgit Road is completed, 
there will out of this amount be a reasonable sum available for such further 
works on the Gilgit frontier, e.g., the road to Ghalt and the Punyal road, as may 
be necessary. But whatever is done, I would strongly urge that once the year’s 
estimates are settled, no excess expenditure, except for reasons of absolute 
necessity approved by the Government of India, should be permitted. The present 
Public Works estimates as passed by the Council are scarcely known to the 
Executive Engineers in charge of the various construction works in the State, 
I had the assurance of the Chief Engineer in September, after he had returned 
from an inspection of the Gilgit Road, that the sum of 4 lakhs of rupees 
provided in the current year’s Budget would amply cover the current year’s 
expenditure. Two days afterwards the Executive Engineer in charge of the 
road, Mr. W. H. Johnson, informed me that the current year’s expenditure might 
possibly amount to Rs. 5,99,088—an increase of Rs. 1,99,088. There is no clause 
in the agreement with Messrs. Spedding & Co. placing any limit on the 
annual expenditure on the road, and so far as the accounts are concerned there 
is no objection to this. It is, however, a serious matter that the Public Works 
Department are unable to frame a better estimate of the cost of the work likely 
to be executed on the road than has been done in the current year. It is unfair 
to the State to be called on without warning to provide from 1| to 2 lakhs of 
rupees for public works expenditure over and above what was expected, and such 
irregular and unexpected demands have undoubtedly contributed to some extent 
to the embarrassed state of the finances. As the Gilgit Road was a necessity 
and also a work of utility, by which the State is enabled to march troops to the 
frontier with comparative economy and ease, 6 lakhs of rupees could have been 
provided in the estimates of the current year for the work as well as 4. But it 
is little to the credit of the Public Works Department that its head remained in 
ignorance of the probable amount which will be required for the work durin^ 
the current year until within a few weeks ago. 


Messrs. Spedding & Co. 

Establishment and contingencies for 3 years 
Repairs 

5 bridges and extra works 




45 


163. The heavy snowfall on the Bandipur-G-ilgit Road will always he a 
AU ,. , , rt .. ., serious drawback to its utility as a military road. The 

Alternate routes to Chlg.t Commander-in-Chief, Raja Ram Singh, has informed 
me that he believes that a shorter road and one much more free from snow could 
be constructed from near Domel to Gilgit. Raja Ram Singh has not, however, 
any personal knowledge of the country. The line of country will, I understand, 
be shortly surveyed by Mr. J. R. Bell of the Indian Public Works Department. 
There are, I understand, several routes to be surveyed. Starting from Muzaffar- 
abad one route runs up the Khagan valley, following the Kunhar river and 
crossing the Babusir Pass into Chilas. Another route, starting also from Muzaffar- 
abad, follows the line of the Kishenganga and Kankatori rivers, crossing the 
Bandar Pass into Chilas. There are also alternative passes known as the 
Kankatori and Salarga passes which may afford a better crossing into Chilas. 
It may, however, be found still better to follow the Kishenganga river past its 
junction with the Kankatori river and running up a comparatively open valley 
to make north and by east for the Mallik Pass. A very short and apparently easy 
piece of road would connect this line with the present Bandipur-Gilgit Road on 
the further side of the Tragbal Pass. 

The improvement of the road to Leh, especially in Kashmir proper, is also 
a very necessary work, which could be carried out at a comparatively small 
cost. 

164. An important question with reference to 
Excess Of expenditure over the final accounts of Samvat 1947 (see paragraph 76) 
income in Samvat 1947. is the extent by which ordinary expenditure has ex¬ 

ceeded ordinary revenue. 

Excluding the opening balance, which almost certainly does not represent 
the real balance, and withdrawals from Reserve Treasuries, the ordinary revenue 
of Samvat 1947 amounted to Rs. 48,19,818, and excluding the closing balance 
and. payments of arrears the ordinary expenditure amounted to Rs. 49,42,645, or 
about l£ lakh of rupees in excess of the revenue. 

This expenditure was not, however, normal, for the State debt had increased 
during the year by Rs. 7,59,150. On the other hand, the cash balance at the 
close of the year was greatly in .excess of that at the beginning of the year. The 
balance at the beginning of the year was probably underestimated and was not, 
I believe, far short of 8 lakhs of rupees. The grain, &c„ in store at the end of 
the year was also valued at a larger sum than that (according to the final 
accounts) at the beginning of the year. But as the estimate is a very doubtful 
one, I think the grain at the end of the year and at the beginning of the year 
may be considered to be of about equal value. If the grain, &c., at the begin¬ 
ning and end of the year is omitted, the cash balance at the beginning of the 
year, instead of being Rs. 1,89,131 only, should have amounted to upwards of 
10 lakhs of rupees. 

Eurther, it may reasonably be held that Messrs. Spedding & Co.’s bill on 
account of the Jhelum Valley road was an extraordinary charge, as it was 
the final bill for completion of the road. If these views are accepted, the 
account would work out as follows :— 

Rs. R«. Rs. 

Ordinary revenue ... ••• 48,19,818 

Ordinary expenditure ... 49,42,645 

Add— Arrears ••• ••• 7,59,150 

JJeduct -— Messrg. Spedding & Co.’s bill ... 2,57,815 

-- 5,01,335 

-- 54,43,980 

Balance excess expenditure ... ... 6,24,162 


165, Having disposed of the accounts of Samvat 1947, it is now necessary 
to turn to the Budget Estimates of the current year. 
The Budget Estimates for g amva t 1948. In the following statement I give the 
Samvat 1948. original figures, the three months’ actuals to the end of 

con 1420-—12 





46 


“ Har,” that is, roughly to the end of June, (I have not been able to obtain later 
actuals) and my own revised figures. Except as regards forest revenue, the 
figures for which were, I understand, subsequently altered by Mr. McDonnell, the 
figures in the original estimate agree with those furnished by the State Council 
to the Resident. 

The three months’ actuals are very rough and the classification unquestionably 
faulty. My own revised figures are based on materials supplied by the Revenue 
Member and on the result of enquiries made from the customs and octroi con¬ 
tractor, the Conservator of Eorests, and as many other officers as I have come in 
contact with. 

166. As regards expenditure, the figures of the estimate are, with very 
trifling corrections, those furnished to the Resident by the State Council. The 
three months’ actuals have been furnished by the Daftar Diwani, and in addition 
payments have been made to the extent of Rs. 5,56,419 on account of arrears. 
The revised figures are those I have arrived at after careful consultation with the 
heads of departments and they include all charges estimated to the end of the 
year. The arrears are those already discussed (paragraphs 68—75) entered against 
the particular departments to which they relate, and finally an estimate is given 
of the actual cash required in the current year to clear off all current liabilities 
and arrears. The debt due to the Dharmarth. Fund has not been entered in 
these estimates, as it is a special item. 


Revised Budget, Samvat 1948 (a.d. 1891-92) : Revenue. I Revised Budget, Samvat 1948 (a.d. 1891-92): Expenditure. 


47 


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48 


167. As regards the revised figures for revenue, the Land Revenue figures 
-r, . , . show that the steady reduction in receipts already 

Revised revenue figures. ,, , , , ,. , ,. , . / 

alluded to continues. The reduction, which is entirely 
in Kashmir, is attributed to floods. 


168. The Customs and Octroi contractor, Sardar Hari Singh, is quite 
solvent and the estimated amount will be realised, provided that no disputes 
regarding the terms of his contract arise. It will, however, be unusual if no 
disputes do take place. 


169. Grazing fees are this year managed directly by the State and have 
not been given out on contract. If the tax collectors are properly looked after 
Rs. 85,000 at least will be collected, if not the realisations will not exceed 
Rs. 50,000. 


170. I believe the Excise revenue as estimated will be worked up to, always 
provided the management is efficient. 

171. The receipts from State property in India w ill reach the estimate, if 
the existing dispute with the contractor is promptly and judiciously settled. 
He is perfectly solvent, and, so far as I can judge, willing to act fairly. 

172. Court fees and Postage should exceed the estimate by Rs. 20,000 if 
properly looked after. 

173. Judicial fines and Jail receipts will probably approximate closely to 
the estimate. 


174. Postal and Telegraph receipts will probably approximate to the 
estimates. The low actuals for three months are due to misclassification and to 
non-payments into the treasury of sums realized. 

175. The figures for Contracts have been revised on a careful consideration 
of the sums for which the contracts have been farmed out. The reduced estimate 
will perhaps be slightly exceeded. 

176. The revised figures under Porests have been settled after detailed 
discussion with the Conservator. The decrease is chiefly in the Buniar forest. 
Possibly the revised estimate may be slightly exceeded. 


177. A portion of the Public Works receipts have been separated out, but 
it has not been found possible to separate out the whole. 

178. The three months’ Miscellaneous figures contain certain items which 
should be classified under other heads. The estimate w r ill probably be realised 
as revised. The revision of the Miscellaneous figures has been carefully consi¬ 
dered. Several items have contributed to the reduction, Sericulture in parti¬ 
cular. The estimate was for Rs. 70,000, the revised Rs. 2,000, the heavy 
reduction being due “ to disease and want of proper supervision.” The receipts 
from sale of “ Kut” root have also been largely reduced. 

No attempt has been made to indicate book credits for Service Postage 
and Telegrams, as no materials are available for distributing the per contra 
expenditure. 

179. The total revenue as revised, excluding withdrawals from the Reserve 
Treasuries, is Rs. 54,17,948 as compared with an 
estimate of Rs. 58,49,006—a reduction of Rs. 4,31,058. 

Of the withdrawals from the Reserve Treasuries Rs. 2,57,815 went in payment 
of Messrs. Spedding & Co.’s bill for the Jhelum Valley road already referred 
to. Large payments for Military Expenditure have also been made. The 12 
lakhs Chilki rupees just withdrawn as a loan from the Reserve Treasuries Rave 
been estimated to be worth Rs. 7,50,000 at annas 10 per Chilki rupee, but this 
amount depends on the actual outturn of these-rupees. In the Reserve Treasury 
accounts the old Chilki rupees have been taken as worth annas 8 each. 


Total revenue as revised. 


180. As regards expenditure, Raja Moti Singh’s allowance as budgetted 
for has been omitted. The three months’ actuals do 
not show the Modikhana charges on account of His 
Highness the Maharaja against the Civil List head, as 


Revised figures for expen¬ 
diture—tlie Civil List, 


49 


the Modikliana charges have been included in the General Department figures. 
I have entered Rs. 30,096 as arrears of His Highness’ allowances, because this 
sum is said to be due. But I venture to think that no such arrears should be 
recognised, and in any case, if the arrears are to be recognised, then any excess 
expenditure should he taken as a set-off against arrears. Thus His Highness’ 
budget grant for travelling allowances for 1947 was Rs. 18,157 (paragraph 134), 
his actual expenditure Rs. 30,892. I think the excess Rs. 12,735 should be 
deducted from the sum shown as arrears. 


181. 


The army. 


The Revenue Department. 


The Military Department estimate of Rs. 16,88,475, including arrears 
of pay, lias been reduced by fully 2 lakhs of rupees, 
and it is just possible that some further reductions 

will be found possible. 

182. The Foreign Department estimate has been carefully revised by 

rn . . Raja Amar Singh and very considerable reductions 

. rw F„r„g» Department. effected But it has beeil ne cessary to provide funds 

for the approaching visit of His Excellency the Viceroy, and this has been 
arranged for under the Foreign Department; hence the increase. 

183. No permanent reductions in establishments find a place in the current 

year’s budget. Numerous permanent reductions have 
• N ° P e , r T anen . fc red 1 act,( : l \ s been suggested to or proposed by the members of the 
for in the current year. Council in charge of the various Departments, but 

such reductions require careful consideration and can¬ 
not, with due regard to the interests of the officials concerned and of the State, 
be carried out until next year. 

184. The Revenue Department estimate was Rs. 13,73,513 plus arrears 
Rs. 3,97,564, total Rs. 17,71,077. This has been re¬ 
duced to Rs. 15,33,035—a very considerable reduction. 

In the revised figures the expenditure on forests and excise has been separately 
shown. Similarly the figures of the Judicial and General Departments have 
been broken up. It will be seen how extremely valuable the forests of the State 
are as a source of revenue. I have very little doubt that if a wise policy is 
pursued, the net revenue will in two or three years rise to between 6 or 7 lakhs 
of rupees. 

185. I have not found it possible to make any material reductions in the 

revised estimate under the General Department, though 
The General Department. numerous permanent reductions have been indicated 

by me for consideration. 

186. In the Public Works Department I had arranged for large reductions 
in expenditure, which would have brought down the 

The Public Works Depart- estimate of Rs . 12,49,612 to Rs. 10,66,000. But it 

has been found that while 4 lakhs were provided for 
the Gilgit Road the expenditure will amount to Rs. 5,40,000 at least. A sum of 
Rs. 20,000 additional has been provided for ferry boats on the Indus, hence 
my original figures of Rs. 10,66,000 have been raised by Rs. 1,60,000 to 
Rs. 12,26,000. 

In the item of arrears Rs 4,84,299 against the Public Works Department, 
Messrs. Spedding & Co.’s bill, which has been paid, for the Jhelum Valley 
road, lias been included. 

187. No reduction has been made in the Judicial Department figures. On 
m ,. . , ,—« , , the contrary, the estimate has been slightly increased. 
Ihe ju lC m epar men . The estimates were moderately framed. In future 

years the Dharmarth Fund will bear a portion of the charges on account of 
medical and also perhaps educational work in the State. 


ment. 


188. The net result is that the ordinary expenditure of the State is esti¬ 
mated at Rs. 57,52,469. If 4 lakhs on account of the 
Net ordinary expenditure Road be excluded as being extraordinary expen- 

in Sam vat 1948. diture, leaving about 1^ lakh to represent ordinary 

con 1420—13 


50 


charges in future for the up-keep of that road, and if other extraordinary 
items, such as charges in connection with the visit of His Excellency the Viceroy, 
are also excluded, the net ordinary expenditure of the State in the current year 
may be taken to he about 52f lakhs of rupees. This compares favourably with 
the estimated revenue, Rs. 54,68,000, and if reasonable care is taken, ordinary 
revenue and ordinary expenditure should balance. 


189. While, however, a considerable reduction in expenditure is perfectly 
feasible, accompanied as, I believe, by increased effici- 
" uue ency, the administration of the chief heads of revenue 
is not, in my opinion, satisfactory. The following 
figures recapitulate the figures already given :— 


Administration of 
not satisfactory. 



Actuals, 
Samvat 1946. 

A ctuals, 
Samvat 1947. 

Estimate, 
Samvat 1948 
(revised figures). 


Rs. 

Rs. 

Rs. 

Land Revenue 

36,99,700 

34,69,400 

35,82,500 

Customs, &c. 

2,62,100 

2,09,700 

3,60,000 

Grazing fees 

28,000 

917 

73,400 

Excise 

33,900 

31,200 

40,700 

State property 

35,500 

16,200 

' 35,000 

Contracts... 

1,70,400 

1,28,500 

1,80,200 


It will be seen that in every single item the actuals of Samvat 1947 are 
lower than those of Samvat 1946. It is hoped that the actuals of Samvat 1948 
will show better results, but to ensure this, more vigorous and more active 
revenue administration is absolutely necessary. It is not at all satisfactory that 
the best figures we can estimate for the land revenue receipts of Samvat 1948 
are still more than a lakh of rupees below the realisations of Samvat 1946. 
The settlement now in progress does not, I am fully aware, raise the revenue 
materially in Kashmir. But it has a distinct tendency to substitute cash pay¬ 
ments for payments in kind, and this tendency will, I believe, continue. Hence 
an increase in the cash collections in Kashmir should be distinctly perceptible 
year by year. As regards Jammu, it is, I believe, fully admitted that the revenue 
is very lightly assessed and that a re-settlement, by bringing under assessment 
land broken up since last settlement but not yet assessed, would result in an 
increase of land revenue, estimated at from 3 to 5 lakhs of rupees. Yet in this 
prosperous division of the State the land revenue in Samvat 1947 fell short of 
the estimate by about 1^ lakh of rupees. 


Results of a continuance 
of present revenue adminis¬ 
tration. 


190. If this state of things is permitted to continue, if land revenue is 
permitted to fall into arrears, if contracts are so badly 
drawn up as to admit of disputes, or if they are given 
to men who are known to be insolvent, the most rigid 
economy in expenditure will not avail to save the 
Reserve Treasuries from depletion and the State from bankruptcy. I am convinced 
that with vigorous revenue administration and watchful care over expenditure, 
the State could not only pay its way with ease, but could carry out without 
difficulty all public works that may be necessary, could provide a considerable 
body of troops trained to a high standard of efficiency, and could place in its 
Reserve Treasuries a moderate sum every year. But neither can rigid economy 
alone, nor good revenue administration alone, effect these desirable results. Both 
must be combined and persevered in. 


191. It will be seen that I estimate that to pay all claims and arrears due 

Amount required to pay by the S . tate R f- T 5 ; 30 ’ 005 are squired in the current 
all charges. y ear - Against this we have revenue estimated at 

Rs. 54,67,948, withdrawals already made from the 












51 


Reserve Treasuries amounting to about Rs. 12,94,000 and a balance in band 
amounting to Rs. 7,24,206, total Rs. 74,36,154. I am aware that there is also 
grain, &c., in store, supposed to be worth Rs. 8,13,286, but as I have found it 
impossible to arrive at an estimate of what this grain was really worth, and as an 
equivalent quantity of grain, &c., or something not far short will probably be 
in store at the close of the year, this grain, &c., may roughly be considered to be 
a constant quantity and omitted from calculation. 

192. On this view we require Rs. 75,30,005 minus Rs. 74,36,154, 
•equal to Rs. 93,851, to clear the liabilities of the current year. In addition 
Rs. 1,72,000 are due to the Dharmarth Fund (paragraph 234). The State will 
therefore require Rs. 2,66,000 to clear off its liabilities in addition to its ordinary 
revenue and. to the withdrawals from the Reserve Treasuries already made. In 
doing so it will drain its treasuries and will not probably have a single rupee in 
balance on 1st Bysakh, Samvat 1949. This cannot, of course, be permitted, 
and the State should, I think, for a year or two, if not as a permanent arrange¬ 
ment, begin the year with a cash balance of 5 lakhs of rupees. 

This makes upwards of 7\ lakhs of rupees still required. To this has to be 
added lakhs just withdrawn from the Reserve Treasuries, total about 15 
lakhs. If the previous withdrawals from the Reserve Treasuries are held to be 
in the nature of a loan, the total comes to (say) 20 lakhs; if not the total 
amount of the loan from the State Treasury can be taken to be 15 lakhs. The 
latter sum may, I think, be taken as the correct amount. The 5^ lakhs were 
withdrawn before any arrangement had been arrived at regarding a loan, and 
the withdrawal was on precisely the same footing as withdrawals in former 
years. 


I will now show what, in my opinion, might be taken as a fair Budget 
Estimate for next year, Samvat 1949. The figures 
are of course very rough, but they will bear a good 
deal of examination. 


193. 


Suggested Budget Estimate 
for Samvat 1949. 


As regards revenue, it is assumed that under ordinary revenue heads the 
revenue of Samvat 1946 can be realised. 

Forests will, it is believed, exceed by a lakh the figures of the current year. 
In Miscellaneous the figures of Samvat 1946 have been taken, while under 
arrears I take the figures of Samvat 1947. 

All these figures are moderate, and I am convinced that they could be rea¬ 
lised in an ordinary year with good revenue administration. 

Estimated Revenue , Samvat 1949. 



Rs. 

Ordinary revenue (Samvat 1946) 

... 43,88,000 

Interest on promissory notes 

88,000 

Forests 

... 6,00,000 

Public Works Department (estimate) 

25,000 

Miscellaneous (Samvat 1946) 

1,12,000 

Realisation of arrears (Samvat 1947) 

... 2,69,000 

Opening cash balance (estimate) 

... 5,00,000 


Total ... 59,82,000 


No adjustment has been made in respect to income arising from Service 
Telegrams and Service Postage charges, pending consideration of the question by 
the State Council. 

194. As regards expenditure it is assumed that all arrears have been cleared 
off, that His Highness the Maharaja’s allowance will be fixed at 6 lakhs (this 
amount to include Modikhana and all other charges), that a number of reduc¬ 
tions in permanent establishments, already agreed to in principle by the Members 
of Council, have been carried out, that 5i lakhs will be required for the Gilgit 
road (this should complete the work), and that one lakh of the 15 lakhs’ loan is 
repayable on the last day of the year, with interest at 4 per cent, per annum. 






52 


For the rest I have based my estimate on the estimates of Samvat 1948. The 
results are as follows :— 


Estimated Expenditure, Samvat 1949. 



Rs. 

Rs. 

His Highness the Maharaja 

... 6,00,000 


Raja Amar Singh 

50,000 


Raja Ram Singh 

50,000 

7,00,000 

Military Department 

•.• ... ... 

11,75,000 

State Council 

C Ordinary ... 

1,06,000 

6,00,000 

Public Works Department ... 

-< Gilgit Road 

5,50,000 


( Miscellaneous 

50,000 


( Ordinary ... 

8,75,000 

Revenue Department 

< Forests 

1,80,000 


( Excise 

10,000 


( Law and Justice 

70,000 

Judicial Department 

J Jails 

j Education ... 

25,000 

35,000 


\ Medical 

20,000 

e. —The Dharmarth Fund will bear the balance of “ Medical.’ , ) 



("Post 

75,000 


j Telegraph ... 

30,000 

General Department 

1 Police 
| Stables 

1,25,000 

1,00,000 


I Press 

(^Municipalities 

20,000 

30,000 

Foreign Department 

3,50,000 

Account Department 

• •• 

35,000 

Repayment of loan with interest 

1,60,000 

Reserve for miscellaneous and 

unforeseen expenditure ... 

1,00,000 


Total ... 

54,21,000 


Closing cash balance ... 

5,61,000 


Grand Total ... 

59,82,000 


195, I believe that careful administration of the revenue and a rigid check 
over expenditure will produce these results, and that quite possibly the actual 
results will be better ; for no credit has been taken for any further investments 
of surplus money in the Reserve Treasuries, which would add at least Rs. 50,009 
a year to the revenue, and the miscellaneous revenue has been taken at a 
much lower figure than will probably be realised if this branch of the revenue is 
administered in a liberal and mercantile spirit. On the other hand, no attempt 
has been made to cut down expenditure to an undue extent, and the provision 
for miscellaneous and unforeseen expenditure is very liberal. 


196. I must, however, repeat that far more vigour and energy must be 
0 , , shown in its administration. Less reliance must be 

ministration. placed on circulars and written orders, more care must 

be taken to ensure absolute and immediate compliance 
with instructions issued by the Council. Contracts must only be given to 
solvent bidders and no alteration in the terms of a contract once fixed should be 
permitted. Proper classification of the stamp receipts is desirable, and a careful 
check over the printing of stamps is absolutely necessary. Vigour is necessary 
in the matter of outstandings. In regard to miscellaneous income, which 
depends a good deal on the sale of produce, business should be conducted on a 
proper mercantile basis and produce should not be exposed to deterioration, 
waste, or theft, because the prices of a few years ago cannot now be realised. 


197. It will, of course, be necessary to take early measures to carry out 

Permanent reductions in f liuct , io ’? r s “expenditure on the lines I have indicated 
expenditure. *9 eac h Member of Council and to intimate to heads 

of departments that their estimates must not exceed 







53 


the sums fixed. As regards the State’s “ reserve for miscellaneous and unforeseen 
expenditure,” it should be clearly understood that it must not he trenched upon 
except m cases of absolute necessity. 

198. Lastly, in preparing future Budget Estimates, the irritating and 

Annas and pies to be omit- P lan of statin S the figures in annas and pies 

ted in Budget Estimates. should be stopped. Actuals should be brought out in 
, . rupees, but as regards estimates it is quite sufficient 

to bring out the totals of major heads in thousands of rupees, small amounts 
being added to or subtracted from the original totals for “ rounding.” 

The insertion of annas and pies (I have seen half-pies in the accounts) gives 
an air of extreme accuracy to the estimates, which is, however, singularly falsi¬ 
fied by the actuals. 


199. In reviewing the actuals for Samvat 1947 I have already discussed 

Minor measures for in- the more i “P? rtaat measures which are, in my opinion, 
creasing the revenue. necessary to improve the revenue. There are a few 

minor matters which may be here noticed:— 

(1) Many old irrigation channels require to be repaired or cleared 
out. A sum of Bs. 5,000 a year devoted to this purpose would probably 
return an enhanced revenue of Bs. 500 for every Bs. 5,000 spent. The 
Settlement Officer has the matter in view, and has got a trained Assistant 
<Mr. Bivett) for the work. Any large or important works should, however, 
only be executed after the advice of the Public Works Department had 
been obtained. 

(2) Saffron cultivation, though rather precarious, is on the whole very 
profitable. The cultivation has recently declined, but would again, with 
a little assistance from the State, become flourishing. 

(3) It is a question for consideration whether it would not be better 
to keep the account of the land revenue cash collections entirely separate 
from the account of the land revenue collections in kind. The cash account 
might remain as heretofore, but there might be a separate account showing 
the total collections in kind, the sales therefrom and the cash received. 
The cash received from sale of ‘ shali,’ &c., might be entered under a sepa¬ 
rate minor head under Land Bevenue in the accounts, by transfer monthly 
from the account of the collections in kind. I do not insist on this arrange¬ 
ment, but I think, if it could be carried out, that it would simplify the 
.accounts. 

(4) I understand that the Punch feudatory State formerly paid a 
certain sum as tribute to Kashmir, but that no payments have been made 
for several years past. This matter should be looked into and the tribute 
realised if properly due. 

(5) An accurate and complete list of all articles stored in the Toshakhana 
should be prepared. Any articles not required within a reasonable time for 
State purposes should, if liable to deterioration, be sold and the proceeds 
credited to the State. I understand that there is a considerable quantity of 
gold in the Toshakhana. Having regard to the existence of Beserve Trea¬ 
suries in the State, it would, I think, be better to keep a very small quantity 
-only of gold in the Toshakhana and the rest in the Beserve Treasuries. In 
any case the Toshakhana accounts should be audited annually and the stock 
carefully checked by some independent person, for example, an official 
belonging to the new Account Department. 


200. As regards expenditure, the following is a summary of the permanent 
reductions proposed, with reference to the Budget of 
Samvat 1948. Most of these proposals have been laid 
before the Council or before the Members in charge 
of the Departments to which they relate and have 
Some reductions in other than establishment items 
have already been carried out in accordance with these notes in the revised 
estimates of the current year. 


Detail of proposed perma¬ 
nent reductions iu expendi¬ 
ture. 

received their approval. 


fCON 1420 —14 


54 


Civil List, 8fC. 

A reduction of the Civil List and Modikhana charges to 7 lakhs of rupees 
a year; the allowance to Raja Moti Singh to be stopped. 

Foreign Department. 

(1) Rs. 500 a month is large pay for the officer at the head of the Reception 
Department. Some other work should be allotted to him if this pay is con¬ 
tinued. 

(2) The Barrack and Dak bungalow expenditure might be reduced. A 
“ Khansamah ” on Rs. 25 a month, a cook on Rs. 18, 2 “ Khidmatgars ” on 
Rs. 16 and Rs. 12 a month, stores and wines costing Rs. 4,772, and so on, seem 
very high charges. The Dak bungalows might be let out on contract. Raja 
Amar Singh has got these matters under consideration. 

(3) Rs. 4,000 expenditure on mines in the Budget of Samvat 1948 is high 
and might be reduced. 

(4) If my proposals regarding the Reserve Treasuries are approved, at least 
two-thirds, of the current expenditure might he saved, The guards should he 
supplied by the police or the regular troops. 

(5) The museum expenditure is heavy and- should be reduced. What is 
the use of a watchmaker ? The charge for oil, candles, furniture, &c., oilman 
stores (why oilman stores ?), &e., Rs. 5,468, is excessive. 

(6) The charge for Hazirbashes and Probationers, Rs. 25,000 a year, is 
excessive. The Maharaja’s State Physician, who draws Rs. 375 a month, should 
he paid by the Maharaja himself. One hundred rupees a month should he 
enough for any Hazirbash or probationer. 

(7) Miscellaneous expenses, Rs. 51,000, are excessive. Rs. 25,000 or less 
should suffice. 

(8) The pay of the Residency Vakil, Rs. 500 a month, is high, though he 
is a good officer. He might be given some other work in addition to his present 
duties. 

(9) The pay of the officer in charge of the Tosliakhana Jinsi, Rs. 1,000 
a month, is far too high. He also looks after the Dharmarth Pund and separate 
proposals regarding his pay have been made in discussing the affairs of that 
fund. Rs. 250 a month should suffice for charge of the Toshakhana and he 
should he given additional work if it is desired to retain him on his present 
salary. 

(10) The Civil Auditor, who draws Rs. 500 a month, is totally useless as an 
auditor and does no work. Both he and his clerk should be given work they are 
able to perform or be got rid of. 

Revenue Department. 

( 1 ) The Deputy Governors in Jammu and Kashmir are not required. Their 
services can be dispensed with. 

(2) The account branch of the Governors’ offices and the Accountant 
General’s office at Jammu should be absorbed in the new Account Office. The 
same remark applies to the Public Works, Poreign, and Military Departments. 

(3) Twenty-five chaprassies are not required by the Governor of Kashmir; 
ten should suffice. 

(4) Naib Wazirs do not appear to be required and their services should he 
dispensed with. . 

(5) The Wazarat of Askardu (Skardo) might be placed under the Wazir of 
Gilgit or the Wazir of Ladakh, with, if necessary, a Naib in charge. 

(6) Travelling allowance should not be passed to Wazirs; they should 
travel at their own expense. 

(7) The item of Rs. 1,000 in Jammu for carriage of Tahsil money is too 

high. 


55 


(8) The Mint might he closed for five years. There are 56 lakhs Chilki 
rupees alone in the Reserve Treasuries. 

(9) The State Dharmarth Department, including the Muquarrie and Raqu- 

mat Guzarish, which costs 3f lakhs a year, deals, I understand, with Muafis, 
Jaghirs, charitable grants and special grants made by the State, either in perpe¬ 
tuity, for life, or for a term. It requires most careful examination in view to 
reduction and resumption of unauthorised grants. The Revenue Member has 
stated that he has got the matter in hand. The principal expenditure is in 
Jammu. r 

(10) Rules should be framed in consultation with the new Account Depart¬ 
ment for the grant of pensions in any cases which the Council may decide in 
future to be pensionable. Rules should also be framed for the periodical attend¬ 
ance and identification of pensioners. There are a number of men in the service 
of the State, who in consequence of old age and infirmity are past their work. 
Their services should be dispensed with, a small pension being granted, if admis¬ 
sible under the new rules. 

(11) An attempt should be made to classify and grade the officials in each 
Department and their pay should clearly be fixed either as personal or as 
attached to particular offices. At present the pay to be drawn by particular 
officers is often a matter of negotiation between the officer and the Council. 

General Department. 

(1) A Head Superintendent or Inspector General of Police does not appear 
to be necessary and might be brought under reduction. A revision of the rank 
and file of the police is also, in my opinion, feasible. Considering the peaceful 
character of the population the strength of the police is excessive. 

(2) The Reserve Battalion costs Rs. 53,660 a year, and is, so far as I can learn, 
almost useless except in assisting in the collection of land revenue^ a duty 
which should be performed by the Revenue Department alone. So far as I can 
judge, the. cost of.the Reserve Battalion might be reduced without any detriment 
to State requirements, by Rs. 40,000 a year at least. 

(3) The Gorcliaras or mounted orderlies might also be largely reduced. All 
the duties performed by the Reserve Battalion and the Gorcharas should, in my 
opinion, be performed by the Mian Jaghirdars of the State. These men hold 
Jaghirs worth Rs. 1,75,596 a year, on condition of service when required, but 
hitherto they have not performed any service whatever. This question should 
be. taken up and service commutation feds of adequate amount should be levied 
or service should be insisted on. Either alternative would enable the State to 
reduce largely the cost of, or to dispense entirely with, the reserve battalion and 
the Gorcharas. 

(4) I recommend that Colonel Chamberlain should be consulted regarding 
the general management of and reductions in the State stables. Colonel 
Chamberlain is willing to advise on the subject. I believe that the expenditure, 
if properly looked after, need not exceed Rs. 1,00,000 a year, and that the 
efficiency of the Department can be greatly increased. 

(5) Large reductions in Municipal expenditure are feasible. Rs. 15,000 
for Srinagar and half that sum for Jammu are sufficient. A paid Secretary is 
not needed at Srinagar. The Superintendent of Police could do the work. A 
large office, Inspector, &c., are not required. The police can do the work. The 
fire brigade might be in charge of the police. The present lighting arrange¬ 
ments in Srinagar are unsatisfactory and expensive. The great requirements of 
the city are good sweeping and cleansing arrangements; other matters can wait. 
Dr. Mitra, the State’s Chief Medical Officer, should be consulted regarding 
municipal expenditure. His views are sound and he can certainly show reduc¬ 
tions amounting to Rs. 15,000 a year. If the Octroi receipts could be handed 
over to the Municipalities they could probably become self-supporting without 
further help from the State. 

(6) The Press Department costs Rs. 31,564 a year. The Superintendent 
gets Rs. 500 a month. The cost of the Department is excessive. Rs. 20,000 
should be ample and Rs. 300 a month should suffice for the Superintendent. 


56 


(7) The Modikhana expenditure has been separately dealt with. 

Larger permanent reductions in expenditure are, in my opinion, possible in 
this Department than in any other Department of the State. All the sub-heads 
require most careful examination by the Council. 

Public Works Department. 

(1) The reductions in the direction staff have already been discussed in 
detail (paragraph 158). 

(2) The Store Department requires careful looking into. At present there 
is no proper Store Department whatever, nor are there any proper Store accounts. 
Security should be taken from each Storekeeper, and the accounts and stock 
should be periodically examined. 

(3) Large reductions could be effected by a more prompt settlement of 
contractors’ bills. If contractors are kept for 6 or 12 months without their 
money, they must make higher charges than if prompt settlement of bills were 
the rule. It is certainly not too much to say that prompt settlement of bills 
would diminish Public Works expenditure by at least 10 per cent. 

Judicial Department . 

(1) The Government Advocate’s appointment is unnecessary. 

(2) The posts of Munsifs might be brought under reduction. Civil work 
should be performed by Tahsildars. 

(3) I should be inclined to recommend that the question be considered 
whether the duties of Chief Judge in Kashmir and Jammu cannot be performed 
by the Governors in addition to their own duties. The duties of the Governors 
will be considerably lessened when the Daftar Diwani (and perhaps the treasury) 
is removed from their control, In some non-regulation Provinces in India at 
the present day the Commissioner of Division is also Civil and Sessions Judge, 
and this arrangement, the Governor answering in many respects to a Commis¬ 
sioner, might answer in Kashmir, The State is scarcely sufficiently advanced for 
a separation of the Ciyil and Criminal from the Revenue work. 

(4) Considerable reductions are feasible in the Jail Department. The aver¬ 
age humber of prisoners in the Srinagar Jail is about 160, while the jail guard 
is about 100 strong! Twenty men should be quite sufficient, if kept perma¬ 
nently and properly trained, The Jammu Jail Department costs Rs. 13,795, the 
Srinagar Jail Department Rs, 10,264. Thdre is no reason whatever for this 
disparity, as the average jail population is much the same in both jails. I think 
if Dr. Mitra, the Jail Superintendent at .Srinagar, were consulted, at least 
BA 4,000 might be saved in Jammu. 

(5) The staff and miscellaneous expenses of the Srinagar High School are 
heavy, considering that the average attendance is not greatly in excess of 100. 
The same remarks apply to Jammu and some reductions in both schools should 
be possible, Considering that the bulk of the population of Kashmir is Maho¬ 
metan, it is remarkable that little or no attention has been paid to the education 
of Mahomedans even in reading and reciting the Koran* 

(6) The cost of the Medical Department is moderate for the work done and 
the State possesses an excellent Medical Officer in Dr. Mitra. Dr. Mitra could 
I think, on the occurrence of a suitable yacancy, perform, for a smaller addi¬ 
tional allowance than is now granted, the duties of Superintending Surgeon in 
the State, at present performed by the Residency Surgeon. A very lar°-e portion 
of the expenditure should in future be borne by the Dharmarth Fund and the 
saving to the State should not be less than from Rs. 20,000 to Rs, 30,000 a 
year. A. convenient way of carrying out the reduction would be to place some 
medical institution, e. g., the State Hospital, entirely in the charge of the Dhar¬ 
marth Committee. 

It is not possible to state definitely the amount which will be saved if these 
proposals are accepted. But roughly I estimate that the savings should at least 
amount to 5 lakhs of rupees a year. 


57 


Lastly (and this remark applies to all departments), far more care must be 
taken to appoint really competent men to any vacancies which may occur, irres¬ 
pective of family claims or old service. The first duty of the Council is to 
ensure that each office shall be filled by an efficient officer, and men must not 
be permitted to refuse an appointment because its acceptance entails removal 
from Srinagar or for similar frivolous reasons. Orders regarding appointments 
and transfers must be obeyed without hesitation on pain of forfeiture of ap¬ 
pointment. As regards the appointment of efficient men, no question can possibly 
arise. Yet I understand that, comparatively recently, two men have been 
appointed to be Tahsildars in Kashmir who can hardly write their names. 

N 201. A few remarks are necessary regarding the 

method of disposal 10 8 ^ natural products of the State and the method by which 

they are disposed of. 

There is probably no country in the world more favoured by Nature. The 
soil is rich and the plain country a net-work of irrigation channels. Most 
English fruits can be cultivated in great perfection, while, at the same time, 
wheat, rice and cotton are staples. In India we are accustomed to find rice 
grown chiefly in the more tropical portions of the Empire such as the deltaic 
districts of Bengal. But in Kashmir 53 different varieties have been found in 
one Tahsil, and the great rice crop is reaped, as Baja Bam Singh has informed 
me, just before the snow begins to fall. With all its riches and capabilities the 
people are miserably poor, there are scarcely any traders except the State, the 
village Bania, sometimes considered the curse and sometimes the blessing of the 
Indian village, is non-existent, and there is no large banker or money-lender in the 
country. A large portion of the produce is taken possession of and disposed of 
by the State. All mineral products belong to the State. Everything is the State’s. 

If the State conducted its trade on ordinary mercantile principles no great 
harm would result, hating regard to the very primitive state of society which 
is to be found in Kashmir. 

There is, however, no branch of the administration which has proved so 
entire a failure as the management by the State of its mercantile affairs. 

202. The State, for example, used formerly to buy Pushmina in large 

p , quantities, which was then wrought into the famed 

Kashmir shawls. The present stock of shawls at their 
original price is said to be worth from 6 to 8 lakhs of rupees. I have examined 
a considerable number of these shawls. Many of them are in fragments a few 
inches square, some literally in rags. Large pieces have been cut out of others 
and a piece of common cloth sown in the place. Others must have been exposed 
to damp and the colour has faded and run. In all, shawls worth at least 2 lakhs 
of rupees have been stolen, or destroyed by insects, rats and moisture. I proposed 
a sale of a portion of the shawls either in excess of the State’s requirements or 
which had been damaged. Baja Amar Singh willingly consented. A number 
of shawls have been exhibited during His Excellency the Viceroy’s visit to 
Kashmir, and His Excellency has himself purchased a few specimens. 

203. I have already referred to the State’s stock of Sapphires (paragraph 

* 124), to the management of the revenue received in 
State borax, antimony and j-[ n q ^slxali) (paragraphs 82 to 92), and to the sale of 
cotton ' ‘ Kut ’ (Orris) root (paragraph 125). The State possess¬ 

es or is supposed to possess some 40,000 or 50,000 maunds of Borax stored at 
Leh in Ladakh, but no serious attempt has been made to dispose of it. There 
are said to be 3,000 maunds of Antimony at Jammu similarly undisposed of. 
There are, it is stated, several thousand maunds of raw Cotton in store, some of it 
15 years old. I have urged the Governor of Kashmir to arrange to sell it, what¬ 
ever the amount may be. He has replied that he has applied to the Council for 
permission, but has not yet received it. With such management, a State, which 
should be one of the richest for its size in India, is naturally unable to make 
revenue and expenditure balance. Orders to sell these articles are not given, 
partlv, it would seem, from fear that the subordinate State officials may embezzle 
a portion or the whole of the purchase-money, partly because it does not appear 

con 1420—15 


58 


to be right to the State that any trader except itself should make a profit. Thus 
trade is killed and the State suffers. 


204. There are three Reserve Treasuries in the State, one in the fort at 
,, m . Riasi another in the fort at Salal (both in Jammu) 

I he Reserve treasuries. , ,, • ■, , , • , , , T ., , 

and the third and most important at Jammu itself. 
The treasury in Jammu is, I understand, in the palace, and adjoins the Maha¬ 
raja’s private apartments. 


Two Tehvildars are in charge of the treasure, one on behalf of the Maharaja 
and the other as representing Raja Amar Singh, the President of the State Council. 
Little or no attention appears to have been paid to ensuring the security of the 
treasure at Riasi and Salal. The money in these treasuries was counted by 
Rai Bahadur Pandit Bhag Rum, Member of the State Council, in April last. His 
examination showed that the wooden boxes in which the coin was stored had 
probably been made by the village carpenter and afforded free ingress to rats, and 
that the locks on the boxes were of ordinary make and could be opened by an 
intruder without the least difficulty. 

The wooden shutters of the strong-rooms were deplorably weak, those of one- 
strong-room being partially destroyed by white ants. 

There is, however, a fairly strong treasure guard both at Riasi and Salal. 


Money in Reserve Treasuries 
said to be regarded as an 
appanage of the ruling 
family. 


205. I he money in the Reserve Treasuries is said 
to be regarded as a secret (indeed, it might be said, a 
sacred) deposit and as a personal appanage of the 
ruling family. 


206. I have no particulars regarding the dates of deposit of the money. 

n , . , . . A large portion was, I believe, deposited in the trea- 

Date, of deposit of money. ^ b / Maharaja Gulab Singh, 1 small amount by 

Maharaja Ranbir Singh. It is, I think, quite certain that no additions were made 
by the present Maharaja. 

207. In the time of the late Maharaja the amount of money in the Reserve 

* . . , . ,, Treasuries exceeded one hundred lakhs of rupees. 

Reserve Treasuries. 1 nirty-tour lakhs were withdrawn by the present 

Maharaja after his father’s death to liquidate pressing 
debts and for other purposes; large investments of Reserve Treasuries money 
were made in 1888 in Government paper; at least 4 lakhs were withdrawn in 
the time of Colonel Parry Nisbet, as I understand, to pay off State debts ; large 
amounts have subsequently been withdrawn for the same purpose, and the 
Resident has stated that the Maharaja, when informed “ by the President of the 
Council that it was necessary to take out any money for the public service, had 
never raised any objection.” 


Character of deposits has 
never interfered with the 
withdrawal of money when 
required. 


208. It would seem from this that the sacredness of these hoards has never 
interfered to any serious extent with the removal of 
money intended for the service of the State. The 
nucleus of the reserve was doubtless money hoarded by 
Maharaja Gulab Singh before he became ruler of the 
State, but large additions were unquestionably made to 
the hoard by the subsequent withdrawal of the surplus revenues of the State. So 
long as a surplus existed this course was not open to objection, but when there 
was a deficit a resort to the Reserve Treasuries would appear to be the most 
obvious and proper course to adopt. Although the Maharaja is by courtesy 
permitted to have joint charge of the money, it is not clear why such should be 
the case and why the sole charge of the money should not rest with the Council. 
It is true the Maharaja cannot remove any of the money, but he can, as he did 
a few months ago, refuse his sanction to the counting of the money. 


209. The money in Riasi and Salal was counted by Pandit Bhag 

Counting of the money in ? am ’ but J^ G T 8 ? u ? able „ to count the money at 
Riasi and Salal. Jammu as the Maharaja refused his consent. I would 

strongly urge that the money in the Jammu Reserve 
Treasury should, be counted without delay, and that steps should be taken to 
transfer the entire control of all money in the Reserve Treasuries to the Council. 


59 


Riasi Treasury. ^10; The following is the value of the money in 

the Riasi Treasury :— 


Old Chilki Rs. 17,95,626-8-0 equal to British 
British rupees 

New Chilki Rs. 4 at 10 annas each 
Huri Singhia Rs. 30,638 


Small silver and jewellery 

Total, British Rupees 


Rs. 

a. 

P 

8,97,813 

4 

0 

58 

0 

0 

2 

8 

0 

. 15,319 

0 

0 

9,13,192 

12 

0 

. 46,400 

4 

9 

. 9,59,593 

0 

9 


Salal Treasury. 


211. The money in the Salal Treasury when it 
was counted by Pandit Bhag Ram was as follows :— 


Rs. 

Old Chilki ... ... ... 37,91,221 

Huri Singhia ... ... ... 21,477 

Nanak Shahi and British ... ... 55,727 


38,68,425 

Value in British Rupees... ... 19,62,076 


The old Chilki rupees have been valued at annas 8 each. The value, how¬ 
ever, varies, and it is possible that they might fetch annas 9 or annas 10 each, 
but it is as well to accept the lower value of annas 8 each fixed by Pandit Bhag 
Ram. 


212. The Jammu Treasury should have con- 
Jammu Treasury. tained, according to the State Treasurer, Wazir Bhagju, 

in April last— 


Rs. a. p. 

A receipt for Government promissory notes deposited 

in the Agra Bank, Bombay, nominal value ... 22,07,000 0 b 

Government promissory notes, nominal value ... 7,80,000 0 0 


Cash 
Silver 
Gold coins 


Rs. a. p. 

... 1,14,951 7 0 

3,542 8 0 

... 10,70,448 0 0 


29,87,000 0 0 


11,88,941 15 0 


Total ... 41,75,941 15 0 


213. The total amount in the treasuries in April or May last was there¬ 
fore Rs. 70,97,610-15-9 according to Wazir Bhagju 


Total in the treasuries. 


and Rai Bahadur Pandit Bhag Ram. 


A reference to the Agra Bank, Bombay, however, showed that the Govern¬ 
ment promissory notes held in safe custody by the bank were of the nominal 
value of Rs. 22,57,000 and that in addition there was a sum of Rs. 7,973-7-4 on 
current account. 


There was also a sum of Rs. 50,000 deposited in the Panjab Banking Com¬ 
pany’s branch at Srinagar to which reference has already been made (para¬ 
graph 54). The Government promissory notes for Rs. 7,80,000 have partly been 
sold to defray current expenditure and have partly been handed over to the 
Dharmarth Pund in payment of debts due to the fund by the State. The 
money in the Pan jab Banking Company has not, in my opinion, any connection 
with the Reserve Treasuries. The money was probably a portion of a sum with¬ 
drawn from the Reserve Treasuries, but it was a credit to the State’s revenue 
account before it was placed in deposit with the bank. The small balance on 
current account in the Agra Bank similarly belongs to the State revenues, as 
the yearly interest on the Government promissory notes is credited to State 
revenues and not to the Reserve Treasuries. 











60 


214. It may be added as a curious fact that I have ascertained within the 
last day or two, and entirely by accident, that gold to the value of Rs. 30,000 
is held in the treasury at Srinagar, and possibly a larger sum in gold at 
Jammu, which neither belongs to the Reserve Treasuries nor is included in the 
State accounts. The money is kept as a stock of gold for urgent requirements, 
but it is not Toshakhana money, nor has it as yet been taken into account as a 
portion of the assets of the State. This, at any rate, should be done. As there 
is and will be a stock of gold in the Reserve Treasuries, it would probably be 
better to sell this gold and credit the proceeds to the State. 

215. Since my arrival at Srinagar 12 lakhs Chilki rupees have been with¬ 
drawn from Salal Treasury under orders of the Council and the Maharaja to 
pay off in part arrears and debts due by the State. 


216. The Reserve Treasuries, therefore, contain or hold receipts for the 
following :— 


Four per cent. Government promissory notes of the nominal 
value of 
Riasi Treasury 
Salal Treasury 
Jammu Treasury ,.. 


Rs. 


22,57,000 

9,59,593 

13,62,076 

11,88,942 


Total ... 57,67,611 


In the State accounts the Chilki rupees recently withdrawn from Salal are 
valued at annas 10 per rupee. In the above statement they are valued at annas 8 
per rupee, the value assigned to them by Pandit Bhag Ram. It is impos¬ 
sible, until they have been exchanged, to ascertain whether annas 8 or annas 10 
is the more accurate valuation. Quite possibly the actual value may be the 
mean, annas 9. 


217. Two observations may be made on the above statement. Apart from 
the possibility that the Chilki rupees may fetch something more than the esti¬ 
mate, the selling value of the Government promissory notes is at present 
considerably greater than the nominal value, and possibly the value of the gold 
coins has been underestimated. Raja Amar Singh has informed me that they 
have been valued at Rs. 18 a tola, a low valuation for gold coins, which are 
usually of a high degree of fineness. Quite possibly Rs. 20 a tola may be nearer 
the mark. On the whole, it may, I think, be reasonably held that Rs. 57,67,611 
is the lowest valuation of the money and Government promissory notes in the 
Reserve Treasuries, provided the gold coin in the Jammu Treasury has not been 
tampered with, and it is within the bounds of probability that the real value may 
approximate to 60 lakhs of rupees. 


218. What is the use of the coin thus stored ? The Maharaja cannot 

„ ,, „ legally touch a rupee of it, neither can any member of 

Discussion of the Reserve -i • n -i mi , c,, , ^ c 

Treasury balances. his ± a mily. The State is in a condition of serious 

financial embarrassment. Its servants remain unpaid 
and large sums require to be withdrawn from these treasuries to meet pressing 
demands. The principal currency of the country is Chilki rupees. Yet an. 
enormous number of these rupees has been withdrawn from circulation and is 
lying idle in the Reserve Treasuries. The State is greatly in need of a loan to 
pay off its debts and is also in great need of an addition to its revenue. It seems 
to me that the remedy for these evils is to be found in the Reserve Treasuries. 
They are the natural source from which to obtain a loan and by investment of 
the larger portion of the money lying idle to add to the State’s revenue. 


Proposals regarding the 219. My proposals in regard to the Reserve 

Reserve Treasuries. Treasuries are as follows :— 


(1) To insist on the coin in the Jammu Reserve Treasury being counted. 

(2) To convert all rupees of local mintage and all small silver into British 
rupees. 

(8) To sell all uneurrent coin and jewellery of small value. 




61 


(4) To sell the larger portion of the gold coin, reserving only such coins as 
have a sentimental value attached to them. 

(5) To store a certain quantity of the British rupees thus obtained, say 
10 lakhs, for unforeseen expenses. British rupees always fetch their 
full value. 

(6) To lend the State a sum sufficient to pay off all arrears and debts and to 
provide a fair working balance, say 5 lakhs of rupees. The estimated 
amount of the loan required is 15 lakhs of rupees. The loan to he 
repaid in 15 years with interest at the rate of 4 per cent, per annum. 
The money and interest as repaid to be invested in sound interest¬ 
hearing securities. 

(7) To invest the balance in the Beserve Treasuries in Government promis¬ 
sory notes, Port Trust, Municipal Boards, or the like, and to credit the 
interest received, as is done at present, to the State, until such time as 
the State can dispense with such assistance. When this occurs the 
interest may he added to the principal sum in the Reserve Treasuries. 

(8) To store the British rupees and gold coin reserved at Jammu in a proper 
and secure strong-room and to get rid of the whole or a portion of the 
existing treasury guards. 

220. The effect of these proposals as regards the Reserve Treasuries may 
Effect of proposals. ^e exhibited as follows, the value of the coin, &c., at 

present in hand being taken to he Rs. 57,67,611 and 
the withdrawal from the Reserve Treasury at Salal already made (para¬ 
graph 215) being allowed for :— 



Rs. 

Government Promissory Notes, nominal value 

... 22,57,000 

Loan to the State at 4 per cent, interest 

... 15,00,000 

Reserve in British rupees ... 

... 10,00,000 

Do. in gold coin (say) ... 

1,50,000 

Available for investment ... 

... 14,60,611 

Total 

.. 63,67,611 


The balance available for investment would add about Rs. 56,000 a year to 
the revenue of the State if invested in Government paper. On the other hand, 
the amount in the Reserve Treasuries would steadily increase through the addition 
of the yearly interest on the State loan. This amount would he Rs. 60,000 the 
the first year, Rs. 56,000 the second year, Rs. 52,000 the third year, and so on. 

I do not think the whole of the Government paper belonging to the Reserve 
Treasuries should be kept in the Agra Bank, Bombay. It would perhaps 
he better to open an account with one of the Presidency Banks. In any case 
the bulk of the Government promissory notes could more conveniently he kept 
at Jammu enfaced for payment of interest at the Sialkote Treasury. Some 
arrangement of this kind would save the State the heavy charges at present levied 
at Srinagar for discounting hills on Bombay, which average about annas 12 per 
cent. It w T ould he a boon to many officials in Srinagar and a saving to the 
State if orders were granted to them on Bombay at par in part-payment of their 
salaries. 


221. In short, by these proposals the people would benefit by the addition 
to the circulating medium which is at present insufficient for the requirements 
of the country, the State would benefit by the loan and the increase to its revenue 
derived from interest, and the Reserve Treasuries would benefit by the stoppage 
of the periodical withdrawals from the treasuries and by the steady addition to 
the capital consequent on the payment of interest by the State. 


222. The Dliarmarth Pund was established by Maharaja Gulah Singh in 
rm. tv v A Sam vat 1903 (a.d. 1846-47). It is stated that it was 

ie Darmai 1111 exclusively intended for charitable and religious pur¬ 

poses, such as the maintenance of State temples and charitable institutions and 
of schools giving instruction in purely religious subjects, 


coi< 1420—16 




62 


223. The income of the fund is derived from an old endowment consisting’ 

The income of the fund. of Ja g hir villages made, I understand, by Maharaja 

Gulab Singh, from a recent endowment of Jaghir 
villages made by Maharaja Ranbir Singh on his death-bed and recognised by 
Maharaja Pertab Singh and the State Council, and from the interest arising 
from large cash contributions made from time to time by Maharajas Grulab Singh 
and Ranbir Singh. Since the death of Maharaja Ranbir Singh these cash con¬ 
tributions have practically ceased. 

The receipts in Samvat 1946 from the Jaghir villages and lands granted by 
Maharaja Gulab Singh are stated to have amounted to Rs. 49,740. The receipts 
from the Jaghir villages granted by Maharaja Ranbir Singh amount to about 
Rs. 7,500 a year. 

224. I have no exact information regarding the amount of the cash con- 

Cash contributions to the trib , ul j an8 ‘he dates of payment, but according to 
fund. a statement furnished by the present Maharaja, 

Maharaja Ranbir Singh drew from the revenues of the 
State the sum of Rs. 3,20,000 in 64 months ending with Bhadon, Samvat 1942, 
for the Dharmarth Pund, and I conclude that this amount was paid to the fund. 

This is at the rate of Rs. 60,000 a year. In addition supplies to a large 
amount were and are still given by the Modi khana to the fund. It is stated that 
in the time of the late Maharaja these supplies averaged 6,000 maunds Kashmiri 
or 2,400 Imperial maunds a year. At the present time the amount is said to be 
somewhat greater. 

225. The administration of the Dharmarth endowed villages is peculiar. 

Administration of Dhar. TlleSe viI ' a g eS a 4“ inis ^ red V the Ordinary 

marth villages. revenue stall and the Tahsildars have no authority over 

the cultivators in Dharmarth villages, a system of 
administration which necessarily gives rise to great inconvenience. Cultivators 
in Dharmarth villages are also exempt from ‘ begar ’ (forced labour). 

226. Until the establishment of the State Council the fund appears to 

Administration of the be “ oxclusively administered by or under the 

fund. orders o± the Maharaja. The accounts were, ho we ver, 

kept separate from the public accounts and were under 
the sole management of the Dharmarth officers and the Dharmarth Treasurer, but 
the Maharaja had the same power over the money as he exercised over the public 
funds. During the life-time of Maharaja Gulab Singh it is probable that the 
Dharmarth money was really devoted to religious or charitable purposes, though 
there is no certainty that such was the case. 

227. In the time of Maharaja Ranbir Singh, however, it is evident, if the 

Loans from the Dharmarfcli statements of arrears furnished to me are accurate. 

Fund. tliat lar ge sums were withdrawn from the fund as 

advances or loans to private individuals such as local 

merchants and traders. 

The amount of such loans and advances made in the time of the late 
Maharaja outstanding at the end of Samvat 1946 is stated to have amounted to 
Rs. 3,83,000. Similar loans were made while the present Maharaja was ruler of 
the State, out of which a sum amounting to Rs. 78,700 was outstanding at the 
end of Samvat 1946. 

A few of these loans are as follows :— 


Kunj Lai, Brahmin 
Manorath Mahajan 
Chowdhery Damodar 
Rejha Shah 

Gopala, Goldsmith 
Devi Kasaira 
Sheikh Meerabux 
Kazi Khalil 


Amount Amount 
of loan. recoverable, 

Rs. R s . 

2,968 Nil (insolvent). 

2,691 2,691 

10,812 Nil (defaulter left the State). 

92,333 Nil (insolvent; property confiscated 

by the State). 

3,824 1,000 (from debtor’s property). 

1,006 1,006 

4,000 Nil. 

5,229 Nil. 


63 


It is very likely that many of these debts are ‘ paper ’ debts of the kind so 
well known in. the State, but it is obvious that the charitable nature of the fund 
was fully understood and acted on. 


228. In addition to loans to private persons the present Maharaja drew a 
sum of Us. 71,135 from the fund before his father’s death to meet his private 
expenses, and, it is said, without his father’s knowledge. 

229. It is thus evident that though primarily the objects of the funds 
were of a religious and charitable nature the rulers of the State (Maharaja 
Gulab Singh perhaps excepted) did not scruple to use the capital of the fund for 
such purposes as they deemed necessary, quite regardless of its original character. 
It is, however, probable that there was always an intention implied, though not 
expressed, to refund any sums irregularly drawn, and further to add to the fund 
when more prosperous times came round. The state of the fund was a matter 
of great concern to Maharaja Banbir Singh on liis death-bed. He bound down 
his sons by a solemn promise in writing to respect its character, and Baja Amar 
Singh and Baja Bam Singh are both extremely desirous to carry out their father's 
wishes in regard to it. 


230. At present the fund is managed by Diwan Janki Pershad on a salary 
„ , , „ of Bs. 1,000 a month, under the general supervision of 

fJr ““I* 8 ” 1 Kai Bahadur Pandit Sura] Kaul, C.I.E. The Diwan 

is also in charge of the State Toshakhana and no 
portion of his salary is debited to the Dharmarth Fund. 


It was at one time proposed to debit the whole, or at least the larger portion, 
of his salary to the fund. The Diwan, however, felt conscientious scruples about 
drawing any pay from a religious and charitable fund. The difficulty was satis¬ 
factorily solved by charging his entire salary to the State. 


231. The capital of the fund as exhibited in the 
accounts 0 1 e UD as pei manager’s accounts stood as follows at the beginning 

of the current year :— 


Four per cent. Government promissory notes of the nominal 
value of 

Advance for the construction of the Jammu-Sialkote Railway. 
Advance to the State as a loan 
Outstandings and arrears 

Total 


Rs. 

3,16,000 

12,81,897 

6,00,756 

4,93,792 

26,95,445 


The Jammu-Sialkote Bailway was constructed from moneys advanced by 
the fund and the manager claimed payment of the money thus advanced 
from the State. I do not, however, see any valid reason for admitting this claim. 
The Dharmarth money invested in the railway was, with the exception of a 
sum of Bs. 5,00,000, lying idle. The receipts from the railway are at present 
small—very little in excess of one per cent, on the capital outlay. But even 
so it is pure gain to the fund, and the receipts are certain to increase. If 
the railway is ever carried into Kashmir it is possible that the Jammu-Sialkote 
section may become a very profitable investment, and in any case the receipts 
will certainly increase. I hold that this sum of Pvs. 12,85,000 should be 
considered to be a Dharmarth Bund investment. The investment is in no way 
opposed to the objects for which the fund was started, and it is an investment 
which gives a small return on money of which a large portion has hitherto given 
no return whatever. 

232. The advance due by the State has partly been liquidated in the 

current year and a considerable reduction has on 
Debt due by the State. scrutiny been made in the total amount. 

233. A large portion of the outstandings are absolutely and admittedly 

irrecoverable. At the beginning of Samvat 1947 only 
Outstandings. j>, s 2,01,000 were considered to be recoverable, out of 

which Bs. 20,771 were realised in Samvat 1947. 




64 


Actual capital of the fund. ?34 The capital of the fund at the present time 

may be exhibited, as follows :— 

hs. 

Four per cent. Government promissory notes for Its. 3,16,000 
(nominal) plus Government promissory notes for Rs. 2,80,000 
(nominal) paid by the State in part liquidation of debt ... 5,96,000 

Investment in the -Jammu-Sialkote Hailway ... ... 12,84,897 

Debt due by the State ... ... ... ... 1,72,000 


Total ... 20,52,897 


In addition the following outstandings and arrears are held to be recover¬ 
able :— 


Outstandings and arrears prior to Samvat 1947 .. 
Do. do. of Samvat 1947 


Total 


Rs. 

1,80,229 

5,390 

1,85,619 


A portion of this amount, perhaps half, may be recovered. 


Revenue in Samvat 1947. 


235. The receipts of the fund for Samvat 1947 as 
exhibited in the manager’s accounts are as follows :—- 


By balance at the end of Samvat 1947 
Interest ... ... .,. 

Profit received from the railway investment 
Income from Jaghirs 
Miscellaneous... 

Realisation of outstandings 
Offerings to Ruguath temple 



Rs. 


14,035 

44,113 

13,770 

40,794 

. 

7,685 

., 

20,771 


3,096 

Total ., 

.. 1,44,264 


Expenditure in Samvat 1947. 236, The expenditure was as follows :— 

Rs. 

Dpily distribution of alms and charity and general charges 

for Jammu temples ... ... ... ... 39,559 

Do. do. Kashmir ... ... ... 20,168 

Do. do. in certain sacred towns and places of 

worship in British territory ... ... ... 24,063 

To Dr. M. A. Stein for a catalogue of Sanskrit manuscript? ... 2,225 

Salaries of Dharmarth establishments... ... ... 10,079 

Miscellaneous expenses and repairs ... ... ... 5,227 

Arrears of Samvat 1916 ... ... ... ... 9,205 

Arrears of Samvat 1947 payable in Samvat 1948... ... 9,900 


Tptal ... 1,20,426 


The balance in hand is shown as Us. 33,740, which includes the item of 
Rs. 9,900representing “arrears of Samvat 1947 payable in Sanqvat 1948.” 


237. The real expenditure should have been shown as Rs. 1,20,426 minus 
p i „ ,, Rs. 9,900, or Rs. 1,10,526. The interest shown as 

fund. Pen 1 ure 0 e a receipt included the interest on Rs. 7,80,000 Govern¬ 
ment promissory notes, of which Rs. 5,00,000 were 
subsequently invested in the Jammu-Sialkote Railway. The net surplus was 
therefore Rs. 1,44,264 minus Rs. 1,10,526 of Rs. 33,738. The expenditure does 
not, however, include any portion of the salary of the manager. 


238. 


As regards 

Future of the fund. 


the future of the fund, I am of opinion that it will be 
better not to include the transactions of the fund in 
the accounts of the State. Such a proceeding would 
give rise to misconstruction, and it would, in fact, he an innovation on past and 
present practice. 










65 


Proposals regarding the 239. My proposals regarding the fund are as 

Dhrirmarth Fund. follows 

(1) That the Dharmarth Fund shall in future he managed hy a com¬ 
mittee consisting of the Revenue and Judicial Members of Council, the 
Governor of Kashmir when the Council is at Srinagar and the Governor 
of Jammu when the Council is at Jammu, Diwan Janki Pershad and two 
or three non-official members to be appointed by the Council, provided that 
all members of the Committee are Hindus. 

(2) That the Revenue Member of Council shall be Chairman of the 
Committee and Diwan Janki Pershad, Member and Secretary of the Com¬ 
mittee. 

(3) That the general accounts of the fund and the account of the 
capital of the fund shall be kept by the new Account Department, and that 
the Account Department shall furnish to the Council a yearly statement of 
the accounts of the fund. 

(4) That Rs. 250 a month, representing a portion of Diwan Janki 
Pershad’s salary, shall be debited to the income of the fund in consideration 
of his services as Secretary. 

(5) That the duties of the Committee shall he to determine the objects 
on which that portion of the income of the fund set apart solely for the 
giving of alms and charity shall be spent, and to ascertain that money 
devoted to these objects has reached the proper recipients. 

(6) . That the Dharmarth villages shall in future be administered by 
the ordinary revenue establishment, and the income of these villages he 
collected by the Tahsildars, the Dharmarth villages being in all respects 
treated as ordinary State villages. 

(7) That the present Dharmarth revenue collecting establishment 
costing Rs. 10,000 a year be dispensed with, 

(8) That having regard to the fact that the total amount expended on 
alms and charity from the fund in Samvat 1947 amounted to Rs. 83,790 
only, the Council direct that out of the income of the fund a sum not 
exceeding one lakh of rupees a year shall be placed at the disposal of the 
Committee for the grant of alms and charity and for all expenses connected 
with the management of the fund. 

(9) That any surplus income of the fund after the expenditure of one 
lakh of rupees in alms, (Rarity and general expenses shall be devoted to the 
support of such educational and medical works in the State as the Council 
may direct, 

(10) That the capital of the fund he taken to he as follows :—Government 
promissory notes of the nominal value of Rs. 5,96,000; investment in the 
Jammu-Sialkote Railway, Rs. 12,8.5,000; debt due by the State, Rs. 1,72,000 : 
total Rs. 20,53,000 ; outstandings prior to Samvat 1947 said to be recoverable, 
Rs. 1,80,22.9; outstandings of Samvat 1947, Rs. 5,390 : total outstandings 
Rs. 1,85,619. 

(11) That the amount due by the State to the fund shall be repaid at 
once, and the amount thus repaid invested in interest-bearing securities, 

(12) That all Government promissory notes belonging to the fund 
shall be deposited with the State treasury, Jammu, enfaced for payment of 
interest at Sialkote, but the vouchers for the Railway Investment shall be 
kept in safe custody by the new Account Department. 

(13) That a complete statement shall be furnished of all jewels 
belonging to the fund, with a report showing which of these jewels are 
absolutely necessary for service in the temples in which they are deposited 
and whether any jewels cap be dispensed with and sold for the benefit of 
the fund. 

.con 1420—17 


66 


If these proposals are adopted, the receipts and charges of the fund 
proper for Samvat 1949 might roughly be exhibited 
as follows:— 


240. 


Result of these proposals. 


Receipts, Samvat 1949. 

Charges, Samvat 1949. 


Rs. 


Rs. 

Balance in hand at the end of 




Samvat 1948 (say) 

15,000 

Alms and charity, Jammu 

40,000 

Interest of Government promis- 


Do. Kashmir 

21,000 

sory notes (nominal value about 


Do. British territory. 

25,000 

Rs. 7,60,000) 

30,400 

Salaries (say) 

5,000 

Railway profits (say)... 

15,000 

Miscellaneous (say) 

9,000 

Jaghirs, Rs. 41,000 + 8,000 

49,000 

Medical charges, &c. 

25,000 

Miscellaneous 

8,000 

Balance 

15,400 

Outstandings and arrears 

20,000 



Temple offerings 

3,000 



Total 

1,40,400 

Total ... 

1,40,400 


The receipts will probably, with good management, he larger than those 
shown above, especially if the outstandings and arrears are properly dealt with. 
The receipts from the old Jaghirs in Samvat 1946 were Rs. 49,741 as compared 
with Rs. 40,794 in Samvat 1947. There were special reasons for a small decrease, 
but at least Rs. 45,000 should be realised in ordinary years. As regards ex¬ 
penditure the Committee will not probably expend more than Rs. 90,000 a year 
on alms, charity, salaries, &e., for some time to come, so that a larger sum than 
Rs. 25,000 can, if need be, be devoted to medical purposes or a larger sum than 
Rs. 15,400 may be carried forward. If desired, a small grant could be made 
towards education. 


241. The conclusions to which my detailed review 
Conclusions. of the finances of the State have led may be stated very 

briefly. 

The general administration is too much centralised in the Council. No 
official of the State is trusted. The Governors are obliged to refer petty 
questions to the Council for decision, and are frequently employed on work 
which should be performed by a chaprassie. The subordinate officials in like 
manner have no real powers nor initiative, and must in their turn refer petty 
and unimportant questions to the Governor for decision. 

Clear and definite responsibility is not, as it should be, attached to every 
office and every department of the State. The Council is thus overwhelmed with 
a mass of petty details to the detriment of its more important duties. The 
revenue administration is wanting in vigour and energy. The chief heads of 
revenue show a disappointing decrease, due principally to defective admi¬ 
nistration. No proper watch is maintained over the monthly receipts, and as a 
consequence early measures are not taken to safeguard the interest of the State 
when default in payment occurs. Great loss is caused to the State in connection 
with the realization of the land revenue in kind, but no adequate measures 
have been taken to reduce the loss. 

Salaries are not paid on due dates and sometimes not for months after they 
have fallen due. Arrears of pay and debts due by the State impair the adminis¬ 
trative machinery, while at the same time debts due to the State are not promptly 
realised. Peculation is rife among the officials, the result to no small extent of 
the irregular manner in which pay is disbursed. 

There is no such thing as an Audit Department in the State. The Civil 
Account Department is most inefficient. The accounts are badly kept, the receipts 
and charges under different heads are not classified with accuracy, and the classi¬ 
fication, such as it is, is obscure. No check is maintained over expenditure, nor 
is the Council acquainted with the progress of expenditure during the year. All 
ordinary budget rules are unknown and the budget estimates when sanctioned 
are in some cases not referred to. 
















67 


The salaries of a number of officials are out of all proportion to the services 
rendered by them. There are a number of totally unnecessary appointments 
'which could he at once abolished. In all departments except the Military De¬ 
partment, large reductions in expenditure are not only possible, but should 
conduce to increased administrative efficiency. The State is quite unable to 
afford the large Civil List drawn by His Highness the Maharaja, and a consider¬ 
able reduction in his allowance is an absolute necessity. 

The Reserve Treasuries of the State are managed on wastef ul principles, and 
^ . are some extent under the control of His Highness the Maharaja instead 
•ol being under the exclusive control of the Council. Coin has been hoarded in 
those treasuries which should have been invested and permitted to circulate in 
the country. 

Ihe great Dliarmarth Fund has been managed on principles akin to those 
which govern the State finance, and large sums have been withdrawn from it 
for purposes entirely alien to the intentions of its founder. 

The expenditure of the State has exceeded the revenue for several years. 
The State is, however, perfectly solvent and has got large amounts of money in 
reserve, though these amounts have in recent years been heavily drawn upon. 
In order to establish equilibrium between receipts and expenditure, it is necessary 

(1) that more vigour and energy be brought to bear on the administration of all 
heads of revenue, (2) that all debts alleged to be due by the State be carefully 
examined and, if found to be correct, discharged, (3) that a proper Account and 
Audit Office be established in the State, (4) that the allowances of His Highness 
the Maharaja be reduced within reasonable limits, and (5) that useless officials 
be got rid of, useless appointments abolished, pay be proportioned to the services 
rendered, and old and worn out officials be removed from the service of the 
State. 

Principal ,ecom Mn! l9ii.,„ s . fonJJfL My P rinci P al recommendations are as 

(1) That on conclusion of the settlement mow in progress in (Kashmir a 
re-arrangement of revenue divisions be carried out after consultation 
with the Settlement Officer, this re-arrangement to be accompanied 
by a revision of the pay of the Tahsildars and Wazirs (paragraph 26). 
Similar arrangements should be carried out in Jammu without delay. 

(2) That a new Account and Audit Office be established in the State with a 

European officer, at the head of it (paragraphs 38 - 40). 

(3) That the account and audit rules drafted by me be introduced as the 
basis of the account and audit system of the State (paragraph 47). 

(4) That the question of the re-settlement of Jammu be carefully consi¬ 
dered and carried out (paragraph 79). 

(5) That the criticisms on the revenue heads be carefully considered and 
acted on by the Council (paragraphs 103 -127). 

(6) That postage and telegraph stamps be obtained as soon as possible from 
Messrs, de la Rue and Co. or any other good English firm (para¬ 
graph 65). 

(7) That the classification of receipts and expenditure suggested by me 

(paragraph 67) be introduced into the State. 

(8) That a proclamation he issued by the Council calling for submission of 
all arrear claims against the State within a period of six months 
from the date of proclamation, after the expiry of which period no 
such claims will be admitted (paragraph 73). 

(9) That in order to discharge such claims and to provide a working balance 
a loan of 15 lakhs of rupees, more or less, be taken from the Reserve 
Treasuries, the loan to be repayable with interest at the rate of 4 
per cent, per annum by yearly instalments of one lakh of rupees 
exclusive of interest (paragraphs 192 and 219). 

(10) That a careful enquiry be made regarding the recoverable and irre¬ 
coverable balances of revenue due to the State, vigorous measures being 
taken to realise recoverable balances and irrecoverable balances bein°> 
written off (paragraphs 93, 119, 121 and 126). 


68 


(11) That in respect to the revenue collections in kind the recommendations 
contained in paragraphs 96 - 98 he carried out. 

(12) That the * begar ’ system be modified as suggested in paragraph 102. 

(13) That a large portion of the State property in British India be sold 
(paragraph 114). 

(14) That the annual allowance of His Highness the Maharaja be fixed at 
6 lakhs of rupees, this sum to include everything (paragraph 142). 

(15) That the Modikhana 'be abolished as a State institution (paragraph 
142). 

(16) That the reductions in permanent establishments referred to in para¬ 
graph 200 be carefully considered and carried into effect, when prac¬ 
ticable, without delay. 

(17) That the question of the State’s stores of Borax, Antimony, Pushmina, 
Precious Stones, ‘ Kut ’ root, Cotton, &c., be at once taken up and the 
articles disposed of, in accordance with ordinary mercantile principles, 
to the best advantage, any reasonable amount required for purely State 
purposes being reserved (paragraphs 202, 203). 

(18) That the proposals made regarding the Reserve Treasuries in para¬ 
graph 219 be agreed to by the Council and carried out without delay. 

(19) That the proposals regarding the Dharmarth Pund contained in para¬ 
graph 239 be agreed to by the Council and carried out without delay. 



Accountant General, Bombay, 

On Special Duty, 


Jammu , 25th November 1891. 



69 


APPENDIX No. I. (Paragraph 25.) 



Name of British Officers 







No. 

transferred to Foreign 
service under the 
Kashmir State. 

Date on which 
transferred. 

Post on which employed 
in the State. 

Net pay 
drawn. 


Remarks. 





Rs. 

a. 

p- 


1 

Rai Bahadur Pandit Surai 
Kaul, C.I.E. 

22nd December 
1888. 

Revenue Member of 

Council. 

1,400 

0 

0 

Rs. 1,300 rising to 
Rs. 1,500. 

2 

Rai Bahadur Pandit Bhag 
Ram. 

6th February 

1889. 

J udieial Member of 

Council. 

1,400 

0 

0 

Do. 

3 

Mr. J. F. H. Collet 

4th March 1889. 

Executive Engineer 

700 

0 

0 


4 

Mr. W. R. Lawrence, 
C.I.E., C.S. 

5th April 1889... 

Settlement Officer, Kashmir 

1,633 

0 

0 

Plus Rs. 150 fixed 
travelling allow- 








ance. 

5 

Surgeon J. R. Roberts ... 

27th May 1889 . 

Agency Surgeon, Gilgit ... 

743 

5 

0 


6 

Lieutenant J. Manners 
Smith. 

9th June 1889... 

1st Assistant British Agent, 
Gilgit. 

800 

0 

0 


7 

Khan Bahadur Sheikh 
Ghulam Mohiudin 

Khan. 

7th do. 

General Member of Council. 

1,100 

0 

0 

Rs. 1,000 rising to 
Rs. 1,500. 

8 

Mahomed Afzal Khan ... 

1st August 1889. 

Naib Governor of Kashmir . 

250 

0 

0 

Rising to Rs. 300. 

9 

Bakhshi Parmanand 

7th do. 

Do. Jammu ... 

250 

0 

0 


1© 

Bhagwan Singh Tkappa . 

16th do. 

Wazir, Wazarat Nawa 

225 

0 

0 





Shahr. 


11 

Pandit Bishamber Nath . 

3rd September 

Inspector of Schools, 

200 

0 

0 

Rising to Rs. 250. 



1889. 

Jammu and Kashmir. 




12 

Pandit Jia Lai ... 

4 th do. 

Chief Judge, Jammu 

700 

0 

0 

Rs. 600 rising to 








Rs. 800. 

13 

Mr. W. H, Johnson 

27 th October 

Executive Engineer, Gilgit 

1,200 

0 

0 

Plus Rs. 150 fixed 



1889. 

Road. 



travelling allow- 








ance. 

14 

Lieut e n an t - Col o n el 

1st January 1890. 

Military Secretary to Kash- 

1,500 

0 

0 



Neville Chamberlain. 


mir Government. 



15 

Mahomed Akbar Khan ... 

1 st Februarv 

1890. 

Inspector-General of State 
Police. 

250 

0 

0 

Rising to Rs. 300. 

16 

Munshi Sirajudin Ahmad 

17th May 3890 . 

Superintendent, State Post 
and Telegraph Offices. 

200 

0 

0 

Rs. 175 rising to 
Rs. 250 by incre- 








ments of Rs. 25. 

17 

Captain R. H. Twigg ... 

14th October 

2nd Assistant British Agent, 

700 

0 

0 




1890. 

Gilgit. 



18 

Mr. J. C. McDonnell 

11th January 

Conservator of Forests 

1,000 

0 

0 




1891. 



19 

Umar Din . 

24th July 1889. 

Jail Darogha, Jammu 

80 

0 

0 


20 

Lala Narsingdas.. 

1st August 1887. 

1st Assistant Settlement 

400 

0 

0 

• ( 



Officer. 





21 

Syad Alain Shah. 

16th April 1890. 

2nd Do. 

300 

0 

0 


22 

Gursahai Mall 

1st August 1887. 

Deputy Superintendent, 

90 

0 

0 




Do. 

Settlement Department. 





23 

Thakur Das 

Do. 

90 

0 

0 


24 

Shamsudin • 

Do. 

Tahsildar, Srinagar 

100 

0 

0 


25 

Amir Singh . 

14th October 

Deputy Superintendent, 

70 

0 

0 



1887. 

Settlement Department. 




26 

Surgeon-Major A. Deane . 

15th do. 

Allowance as Superintend¬ 
ing Surgeon, Kashmir 
State. 

250 

0 

0 



27 

"Lieutenant A. P, D. 


Active Service Troops 

300 

0 

0 

Staff allowance, 


Harris, 






28 

1st Class Hospital Assist- 

22nd July 1890. 

Hospital Assistant, Gilgit 






ant No. 83, Gur Narain. 


Dispensary. 





29 

3rd Class Hospital Assist¬ 
ant No. 332, Bhawani 
Das, 

25th do. 

Do, 






con 1420—18 





















70 


APPENDIX No. II. (Paragraph 47.) 


Account and Audit Department, Jammu and Kashmir. 

General Rules. 

1. All transactions to which any officer of the State is a party in his official capacity 
must be brought to account and all moneys received must be lodged in full, daily if possible, 
in the nearest State Treasury. “Kharij-us-Siaha,” or accounts kept outside the general 
accounts of the State, are absolutely forbidden. 

2. No officer may require that funds belonging to his office or department shall be 
kept apart from the general balance of the State, or be kept out of account, or be received at 
all except under the ordinary rules. 

Revenue Rules. 

3. Each Tahsildar should prepare and submit to his Wazir Wazarat in the month of 
Bysakh a statement showing (1) the name of each village in his Tahsil, (2) the revenue demand 
in cash and in kind realisable from each village during the current year, and (3) the arrears, 
if any, in cash or kind due by each village on account of previous years. If the revenue* 
demand in kind is not nscertainable when the statement is prepared, the statement should 
not be delayed, but a supplementary statement should be prepared and forwarded to the 
Wazir Wazarat when the demand in kind has been fixed. 

4. Each Wazir Wa.zarat shall carefully check the statements so prepared and forward 
them m the month of Jaith to the Governor, who should forward them without delay, with 
his remarks, to the Revenue Member of the State Council. 

5. If the revenue demand in kiud has not been entered by the Tahsildar, the statement 
should, if possible, be completed by the Wazir Wazarat or the Grovernor before submission 
to the Revenue Memoer, but, if necessary, a supplementary statement may be sent. 

6. In the first week of each month of the year each Tahsildar should forward a state- 
ment showing the land revenue receipts, whether in cash or in kind, from each village to his 
Wazir Wazarat, who should forward these statements, duly checked, to the Revenue Member 
through the Governor. 

Wazir Wazarat, Governor and Revenue Member should compare the realisa¬ 
tions of land revenue with the demand and take such steps for recovery of arrears as may be 
necessary. J 

8. Each Tahsildar should submit similar statements through the same channel to the 
Revenue Member, showing the demand and collection in his Tahsil under all other heads of 
revenue of which the collections are entrusted to him. 


Accounts in Tahsils. 


n i’+i, T rf £ !' c< £ >un , ts ,® acl1 Tahsil should be written up daily in a bound register, to be 
called the Gash Rook or Siaha, with a supplementary register for land revenue receipts and 
charges and tor any other receipts or charges which may be numerous. When the items 
are few they may all be entered directly in the Siaha. The daily totals of each supple¬ 
mentary register should be entered daily in the Cash Book. 


10. The Siaha should be examined and signed daily by the Tahsildar or by the officer 
be s C enTdeily to tie wtTrT erS ° f ““ Tahsi1 ’ a ” d “ du * “ amined a “ d si «“ ed sh ™ ld 


it J n The ^ ah , lldai ; sho ? ld frequently examine the cash in his Tahsil and should count 
in addition day eacl V Bcmth - Th e Siaha for the last day of each month should, 

Iwi tl tnH orchnar y items of receipt and expenditure, be accompanied by an abstract 
showing the total receipts, expenditure and balance of the month. This balance should 

“ nd “ S “ tifiedbrtheTaheildart 


Wazarat Accounts. 

t tu 12 u f dail 7 Cask Book similar to that maintained at each Tahsil should be maintained 
a the head-quarters of each Wazarat. In this Cash Rook should be entered as in the case 
the Tahsils, an account of the receipts and expenditure, if any, at the Wazarat Treasury. 



71 


, addition, the entries in the daily Tahsil Siahas should on receipt be transcribed 

into the Wazarat Cash. Book under their appropriate heads of receipt or charge, so as to 
make the Wazarat Cash Book a continuous record of the receipts and expenditure day by 
day and month by month of the whole Wazarat. 

14. On two fixed dates in each month (about the 15th and last day of the month, but 
the dates are subject to alteration by order of the Council) the Accountant at each Wazarat 
should prepare and forward to the head of the Account Department a copy of his Cash Book 
foi the preceding 15 or 16 days together with all vouchers. The accounts in this copy 
should be balanced and the copy relating to the second half of the month should be accom¬ 
panied by a certificate showing that the balance brought out had been agreed with that in 
the Tahsil and Wazarat Treasuries. This certificate should be signed by the Wazir Wazarat 
after careful personal examination of the cash in his Treasury. If the Wazir is absent or 
unable to sign, the certificate may be signed by the officer in charge. 

Note. The most convenient method of writing up the accounts will be to prepare them 
day by day. By this arrangement they can be despatched to the Account Department on 
the prescribed dates without difficulty. 

15. Together with the copy of the Cash Book for the second half of the month the 
Treasury Accountant at the Wazarat should prepare monthly statements showing under each 
major head of revenue (e.g., Land Revenue, Excise, &c.) the total monthly payments in 
cash into the Treasury in each Tahsil in his Wazarat. The totals under each head should 
agree with the totals as shown in the revenue returns, and should be submitted to the 
Revenue Member monthly through the head Account Office. 


Receipt of Money in a Treasury. 

16. Each sum of money paid into a Tahsil or Wazarat Treasury shall be paid in with 
an f Arz Irsal.’ The Arz Irsal should be prepared in triplicate. One portion should be 
returned to the payee as a receipt. The second portion should accompany the daily or bi¬ 
monthly copies of the Cash Book. The third portion should remain in the Tahsil or Wazarat 
for purposes of record. 

Several items of receipt, if there is only one payee, may be entered in one Arz Irsal. 

17. The Arz Irsal should be prepared in the Revenue office. It should show the date, 
the payee’s name, the name of the person on whose account the payment is made, and the 
nature of the payment, i. e., whether it is, for example, an item of land revenue, excise 
revenue, stamp revenue or the like. It should be checked with the demand against the 
payee if ascertainable, and each portion should be initialled or signed by the Tahsildar, 
Wazir Wazarat or officer in charge. 

(Note .—The Arz Irsal may be printed and bound in books of 50 or 100 forms each.) 

Payment of Money at a Treasury. 

18. An officer in charge of a Treasury can only make payments under proper author¬ 
ity. An order issued by any individual officer is not proper authority, unless the Council 
have authorized such officer to issue such order. No payment can be made unless Budget 
authority exists for the charge, or unless a special order has been issued by the Council 
authorising a particular officer to make a specified payment. 

19. In the case of recurring charges a regular printed form for preparing claims 
should be used. This form should show the name of the person preparing the claim, the 
month or period to which the claim relates, the rate claimed, the authority for the charge, 
the date on which the claim is preferred, and the signature of the claimant. 

In other cases no form is prescribed, but each claim should be preferred in writing and 
should contain all necessary particulars, together with a receipt for the sum claimed. 

20. All claims for payment of money will be dealt with by the Account Department 
or by the Wazir Wazarat or Tahsildar, if authorised to deal with such claims. 

21. Each claim or bill should be taken up by the Account Department, Wazir or 
Tahsildar in the order in which it is received and no preference in dealing with particular 
claims should be shown. Claims should not in future be presented to the Governor for 
payment, but there is no objection to a Governor certifying on a claim that it is correct to 
the best of his knowledge. 

22. On receipt of a claim by the Account Department, or Wazir or Tahsildar 
empowered to deal with it, it should be examined by a Treasury Accountant. The arith¬ 
metical calculations should be verified. The correctness of the receipt and the claimant’s 
signature should be examined. The claim should be compared with the Budget sanction 
and with any special orders which may have been subsequently received from the Council 
regarding it. Any deductions which have been ordered should be made and any short 
demand pointed out. 


72 


23. If the claim or bill cannot be passed, it should be returned with a written state¬ 

ment of the reasons for refusing paymeut. A copy of this written statement should be kept 
in counterfoil form. r 

24. If the claim is correct in all respects and the bill properly drawn up, the Treasury 

Accountant will write across it, “Pay Rupees to and debit to 

k 0ad > sab-head The Treasury Accountant will initial this order 

and place the bill before the Account Officer, Wazir or Tahsildar, who, after making such 
further enquiry as he may consider necessary, shall sign the bill. It should then be return¬ 
ed to the claimant for presentation to the Treasurer or Khazanchi, who will pay the money 
and then return the claim or bill to the Treasury Accountant. J 

25 . ' T 11 ® Accountanfc w hl, on the claim or bill being returned to him, enter the details 

either in his Siaha or Cash Book or, in the case of recurring charges, in a separate register 
ot recurring charges, The total of this separate register must be entered daily in the & Cash 
Book. J 


Budget. 


26. 


Officers should commence collecting materials for their Budget in Kartik (October). 

27 No new charges can be entered in the Budget until specially sanctioned by the 
Council. If a charge which requires special sanction has been accidentally entered and 
passed in a Budget, it should not be paid until such special sanction has been received. 

li 28 V Ea0hEead of , an °* c f must prepare a complete estimate, including salaries and 
all sanctioned charges of establishment. 6 

29. The Budget estimate should be for what is expected to be actually received or 
paid during the year under proper sanction, not for the demand or the liabilities which are 
expected to fall due within the year. 

Gross not net receipts and charges must be shown. 

For fixed charges the full sanctioned scale should be shown. Savings if exnected mnv 
be shown as a lump deduction from the total of the sanctioned scale. g P d ’ ma y 

Eh °“ ld '* for “ a Bud S et - with ^ »»<* explanation as 

30 Budget grants lapse at the dose of the year. No savings in grants can be carried 
forward by any department towards estimated expenditure in the succeeding year 

31. No Budget grants can on any consideration be exceeded, and officers should be 
careful not to exceed in ordinary cases their proportional Budget grants Thn* n 

cases three months’ expenditure should not exceed one-fourth of the Budget P-ronl”^ 
months expenditure half the Budget grant. £ lant > 

32. If any officer considers that a Budget grant controlled by him is i;wu 7 
insufficient for the year’s expenditure, he may propose to the Council to place at his 

any savings he can secure in any other Budget grants controlled by hi m P * h dlfe P osaI 

33. The Council will not, except in cases of the utmost urg-encv sanotirm a™ 
tureuot provided for in the Budget, unless savings are clearly Lailable aud can be^ndi-' 

34. The Budget for each officer or department should be submirtprl n 

about 15th January m each year through the Account Department. * the CoUDcd 

35. Each officer who prepares a Budget should send his Budo-et tn a 

Department about the end of November at latest. It should be accompanied t Ac< ; 0Ullt 
tions of increase or decrease in income or expenditure, together with the actual* nf t 
previous years under each separate head. The figures of actual exnpndii ? the two 
November in the year preceding that to which the e“ilSs rlTstoX ” " 'fC° £ 

Account Department and an estimate of receipts and charges to the end of th„ R ?' b 'l 
also be given by the Account Department. The officer responsible for p!-^ ^ S J 10uld 
attend the Council to explain his Budget. P 01 6<iC ^ Eud get should 

36. Actuals should be shown in Rupees, but not in annas and pies The tnf i < 

estimates for the chief heads of accounts, whether of revenue or exnendh , ^ 3 of the 
bited in even thousands, small amounts being added to or ^subtract‘ T’ Sh °",. ld be 
totals for rounding, 8 ' ° 01 subtr acted from the original 

37. All applications relating to new charges and all Budgets «hnnM h u ■ 

the Council through the Account Department and the Member°of CouPdfin' 8 J” bmitted to 

38. Along with each Budget estimate each officer should furnish „ „ V 

estimate, showing approximately the amount of money required bv him 0asJ h re quirements 
his department m each month of the year to which the Budget related Service of 

treasuries where the money is required. 5 ana the treasury or 


73 


Special Rules for Departments. 

r\K fc ^ e a PP^ lcafc ' on °f tbe Military Secretary, the Chief Engineer, the Chief Forest 

Officer and the head of the Post and Telegraph Department, the Account Department will 
issue letters of credit granting monthly or quarterly assignments in favour of the heads of 
the departments, controlling officers and heads of offices in each of the Military, Public 
Works, forest and Postal or Telegraph Departments. These letters of credit will specify 
t le officers in whose favour the credits are granted and the treasuries at which the amounts 
required are available, and will not lapse at the close of each month or quarter. All letters 
of credit will, however, lapse at the close of each year. 

40. Each department will, as far as possible, follow the rules for receipt and disburse¬ 
ment of money already prescribed, and should maintain a Cash Book and subsidiary registers 
when required. The accounts of each separate office to which a letter of credit is assigned, 
or which is in correspondence with a treasury in respect to receipts, should forward bi¬ 
monthly accounts to the head Account Office as prescribed in the case of Wazirs. 

41. In the case of the departments specified above every care should be taken in 
making payments in accordance with the instructions contained in Rules 18 to 25 above. 

4.J. When any doubt is felt by au officer of any of the special departments referred to 
a love or by a Wazir Wazarat or Tahsildar regarding the propriety of a particular claim, a 
reference should be made before payment to the Account Department, but whereas in 
regard to claims and bills presented direct to the Account Office each claim or bill will be 
audited before payment: in the case of the special departments, Wazirs and Tahsildars 
audit will be conducted after payment. 

43. It will be necessary for the Account Department to issue objection memoranda 
and memoranda directing recovery of wrong or over-payments. The Account Depart¬ 
ment will preserve a record in a bound volume of all such objections, and they must be 
promptly attended to by the officer to whom they are addressed. If the officer or person 
retrenched raises any objection, he should be requested to communicate direct with the 
Account Department, or to lay his case through his official superior before the Council. 
It is not the duty of the Treasury Officer to correspond regarding such objections with 
officers who receive objection memoranda. The duty of the Treasury Officer is simply to 
carry out the orders issued by the Account Department. 

44. The special departments referred to above are permitted to keep treasure chests. 
When required, such chests properly sealed may be kept in the nearest treasury. But no 
department shall for the whole of its service retain a sum exceeding Rs. 25,000 in its 
treasure chest at any one time, and the amount in the chest must be reported monthly to 
the Account Department along with the second set of bi-monthly accounts. 

45. Any department is at liberty, with the sanction of the Council previouslv obtained 
to establish any separate funds, such as clothing funds, funds for purchase of remounts and 
the like. But the balances of these funds must be kept in the State Treasury, and monthly 
accounts of the receipts and disbursements of each separate fund must be furnished to the 
Account Department. 

46. Deposits received from contractors or from Civil, Criminal or Revenue Courts 
should be credited to a separate head in the Siaha, and a separate register should also be 
maintained for each class of deposit. On repayment of the deposit the order sanctioning 
the repayment should be quoted against the entry in the register, and the date of repayment 
should also be entered in a column set apart for the purpose. 

47. Any officer may, with the sanction of the Council, obtain a permanent advance for 
petty expenditure, such as repairs to furniture, postal and telegraph charges and the like. The 
advance should not exceed a fortnight’s estimated ordinary expenditure. Amounts expended 
may be recouped by submitting detailed bills of the expenditure to the Account Depart¬ 
ment as often as may be deemed necessary. Each officer should carefully keep a copy of 
his detailed bills in a bound register and should support his bills by the necessary vouchers. 

[Note.— -The forms referred to in the above rules should be prepared, printed and 
distributed by the Comptroller after consultation with the Heads of Departments and 
approval by the Council.] 


4 


con 1420—19 



74 


APPENDIX No. III. (Paragraph 67.) 


Suggested classification of Receipts and Expenditure, Kashmir and Jammu. 
Revenue or Receipts. 

I.— Land Revenue (major head) — 

1. Ordinary revenue (including fixed and fluctuating collections). 

2. Rakhs. 

3. Officials’ chaks. 

4. Rents of gardens. 

5. Rents of Amani villages. 

II. — Customs and Octroi (major head)— 

1. Customs receipts. 

2. Octroi receipts. 

III. — Grazing Fees (major head)— 

1. Grazing fees. 

2. Pahar grazing fees. 

3. Buffalo, cow, sheep, and goat taxes. 

IV. —Excise (major head)— 

1. License and distillery fees, 

2. Sale proceeds of excise opium. 

3. Sale proceeds of “ Churus ” and “ Bhang.” 

4. Sale of red and white wine. 

V. — State property in British India, (major head)— 

1. Receipts from State property. 

VI. — Stamps (major head)— 

1. Sale of general stamps. 

2. Sale of Court-fees stamps. 

3. Miscellaneous. 

VII. — Law and Justice—Courts of Law (major head)— 

1. Sale proceeds of unclaimed property. 

2. Court-fees realised in cash. 

3. General fees, fines and forfeitures. 

4. Miscellaneous. 

VIII. — Law and Justice — Jails (major head)— 

1. Jails (e.g., hire of convicts). 

2. Jail manufactures. 

IX. — Post Office (major head)— 

1. Postage on letters and newspapers. 

2. Postage on banghy parcels. 

3. Sale of Postage stamps. 

Ordinary stamps. 

Service stamps. 

4. Receipts on account of money. 

5. Petty receipts. 

X. — Telegraph (major head)— 

1. Sale of Telegraph stamps. 

Ordinary stamps. 

Service stamps. 

2. Receipts in cash. 

on private messages, 
on service messages. 

XI. — Education (major head)— * 

1. Fees from State schools. 

2. Miscellaneous. 



75 


XII.— Medical (major head)— 

1. Hospital receipts. 

XIII. — Scientific and other Minor Departments (major head)— 

1. Receipts from Vineyards. 

2. Receipts from Hop Gardens. 

3. Receipts from Sericulture. 

4. Receipts from Tea Gardens. 

5. Receipts from Orchards. 

6. Sale of ‘Rut’ (Orris) root. 

7. Sale of Borax and Antimony. 

8. Sale of Sapphires. 

9. Sale of Pushmina. 

10. Miscellaneous. 

XIV. — Mint (major head)— 

1. Gain on coinage operations. 

2. Sale of old stores and materials. 

3. Miscellaneous. 

XV.— Forest (major head)— 

1. Timber and other produce removed from the forests by State agency. 

2. Ditto by purchasers or consumers. 

3. Revenue from forests not managed by the State. 

4. Revenue from the State saw mills. 

5. Sale of fuel, firewood, &c. 

6. Fees, fines, &c. 

7. Miscellaneous. 

XVI. — Interest (major head)— 

1. Interest on British Government Promissory Notes. 

2. Miscellaneous. 

XVII. — Stationery and Printing (major head)— 

1. Stationery receipts. 

2. Printing receipts. 

XVIII.— Buildings and Roads—Civil Works (major head)— 

1. Receipts from tolls. 

2. Receipts from State buildings, including shops. 

3. Receipts from Dak bungalows. 

4. Miscellaneous. 

XIX.— Loans — 

1. Loans from Reserve Treasuries. 

XX.— Miscellaneous (major head)— 

1. Receipts from contracts. 

2. Hunting licenses. 

3. Bazar and fair fees. 

4. Brokerage receipts. 

5. Offerings at religious shrines. 

6. Miscellaneous fees. 

7. Miscellaneous. 

Mote. —Additional minor heads can be added as required, provided they are really 
necessary. Receipts on account of realisation of outstanding balances should be classified 
under the appropriate major head; thus, land revenue receipts should be taken under Land 
Revenue, and so on. A separate minor head can be opened if required. 

A sub-head for advances recoverable may be opened under any major head required 
and also a major head for deposits if otherwise unclassifiable. 

Expendituke. 


1. Land Revenue — 

1. Governors 

2. Wazir Wazarats > With their establishments. 

3. Tahsildars ) 

4. Survey and Settlement. 

5. Collection of “ Shah,” &e. 

6. Patwaris. 


76 


2. Excise — 

1. Cost of establishment. 

2. Cost of materials. 

3. Miscellaneous. 

3. Forest — 

1. General direction. 

2. Conservancy and works. 

3. Establishments. 

4. Working of Buniar Forest. 

5. Miscellaneous. 

4. Post Office — 

1. Supervision. 

2. Conveyance of mails. 

3. State Postal Establishments, 

4. Imperial ditto. 

5. Miscellaneous. 


5. Telegraph — 

1. Supervision. 

2. State Telegraph Establishments. 

3. Imperial ditto. 

4. Construction and maintenance. 

5. Miscellaneous. 

6. Mint — 

1. Establishment. 

2. Purchase of local stores. 

3. Miscellaneous. 

7. Allowances, Salaries and Expenses of Oivil Departments—The Maharaja and 


1. Allowance of His Highness the Maharaja. 

2' » „ Raja Ram Singh. 

3- „ „ Raja Amar Singh. 

4. Miscellaneous. 

8 ‘ Oration— Salarie * and Expenses of Civil Departments—General Adminis - 

1. The President’s office. 

2. n Revenue Member’s „ 

3. „ Judicial „ „ 

4. „ General „ „ 

5. Office of Account and Audit. 

6. Reserve Treasuries. 

7. Toshakhana Naqdi. 

8. Tour expenses. 


9. Law and Justice—Courts of Law— 


1 . 

2. 

3. 


Sadar and City Courts 

Munsifs 

Law Officers 


} 


With their establishments, 


10. Law and Justice — Jails — 


1. Salaries of establishments. 

2. Jail manufactures. 


11. Police — 

1. Superintendence. 

2. City Police. 

3. Mofussil Police. 

4. Reserve Battalion. 

5. Ghorcharas. 


77 


12 . Education — 

1. Direction. 

2. State schools. 

3. Scholarships. 

4. Miscellaneous. 

13. Medical — 

1. Supervision. 

2. Hospitals and Dispensaries. 

3. Grants for medical purposes. 

14. Politiccd — 

1. Subsidies. 

2. Entertainment of Chiefs and guests of the State. 

3. State presents and allowances to Vakils and newa-writers. 

4. State prisoners. 

5. Reception Department. 

6. Toshakhana Jinsi. 

15. Scientific and other Minor Departments — 

1. Exploration of coal and minerals. 

2. Meteorological Department. 

3. Museum. 

4. Viticulture. 

5. Sericulture. 

6. Horticulture. 

7. Hop Gardens. 

8. Tea Gardens. 

9. Collection of ‘ Kut 5 root. 

10. Municipalities. 

11. Menagerie. 

12. Stallion charges. 

13. Census. 

14. Library. 

15. Lalmandi and Ajaib Ghar palaces. 

16. Gardens and State parks notin charge of Public Works officers. 

16. Territorial and Political Pensions — 

1. Dharmartk and Mustamri. 

2. Raqumati Guzarish. 

3. Muquarrari holders. 

17. Superannuation Allowances and Pensions — 

1. Superannuation and retired allowances. 

2. Compassionate allowances. 

3. Gratuities. 

18 . Stationery and Printing*— 

1. Supervision. 

2. Establishments. 

3. Cost of materials. 

19 . Miscellaneous — 

1. Charges on remittance of treasure. 

2. Discount on bills. 

3. Loss by exchange on local transactions. 

4. Subscriptions to periodicals. 

5. Cost of books. 

6. Donations for charitable purposes. 

7. State stables, 

8. Farashkhana. 

9. Miscellaneous. 

20 . Reduction of Debh— 

1. Payment of annual instalment of loan. 

2. Interest. 


CON 1420—20 


78 


21. Irrigation, Minor Works — 

1. In charge of Public Works officers. 

2. In charge of Civil officers. 

22. Buildings and Roads, Military Works — 

1. In charge of Public Works officers. 

2. In charge of Civil officers. 

23. Buildings and Roads, Civil Works — 

1. In charge of Public Works officers. 

2. In charge of Civil officers. 

24. Army Services — 

1. Army and garrison staff. 

2. Administrative staff. 

3. Regimental pay allowances and charges. 

4. Commissariat establishments, supplies and services. 

5. Remount „ ,, „ 

6. Clothing „ „ „ 

7. Barrack. 

8. Medical. 

9. Ordnance establishments, stores and camp equipage. 

10. Miscellaneous services. 

Ron-effective. 

11. Rewards for military services. 

12. Military pensions. 

13. Superannuation pensions and gratuities. 

25. Refunds — 

Minor heads as required. 

Note. —Additional minor heads may be opened if absolutely required. 

Modikhana has been omitted. If retained it should come as a separate head, or it can 
go under No. 7. 


BOMBAY : PRINTED AT THE GOVERNMENT CENTBAB PBESS. 














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